[Editor’s Note: The following two editorials appeared in the Colorado Springs GAZETTE-TELEGRAPH, page 11, on September 6, 1957. They were penned by Robert Lefevre. Although Gustave de Molinari’s article in 1849, “The Production of Security,” is probably the earliest description of competing defense agencies providing protective services, these sister editorials may be the earliest expression of the idea that free market insurance companies could be the major providers of defense services in a stateless society.]
Two Kinds of Protection
Protection is one of man’s basic requirements. From earliest days man has been interested in preparing against assault, whether the attack he anticipated might come from weather, beasts or other men. Man's ability to protect himself against any and all of his enemies is responsible for his survival.
At best, this is an unfriendly world, and one must prepare in peace and calm for the storm and strife which surely will come.
In very ancient times men turned for their protection to the strong. They looked about for a bandit chieftain, mighty and resourceful, on whom they could depend for safety. They knew when they did so, that the bandit was a villain. But they hoped, by paying him in taxes or in tribute, to make him their villain. It was wise, men reasoned, to have a powerful and unscrupulous leader on their side. Such a leader could be counted on, they felt, to offset the fury of some other bandit leader against whom they would be powerless.
The search for protection among the ranks of the bandit chiefs provided men with government. And so long as a particular bandit remained loyal to his own people, men felt secure. They reasoned that it was better to pay a known and limited amount of plunder to their own bandit chieftain than to be compelled in suddenness to surrender everything they had in the dark of night to some other bandit not in their own pay.
The trouble has always been that a bandit is still a bandit, however he is paid. And bandits, like their fellows, are ambitious. Hence, with dreadful regularity, bandit leaders turn upon their own people time after time. They become dissatisfied with the tribute rendered to them voluntarily for protection. They begin by raising the amounts of that tribute according to their own selfish desires of supremacy and vainglory. They end by preying upon their own supporters in a manner not unlike the conduct of the very bandits they have been hired to combat.
When such a practice rises to its zenith, the people who pay become dissatisfied. They deem it disastrous to keep a particular bandit in power. They look back upon the good old days when their particular bandit was tractable and satisfied with smaller sums. And in the end they change their patronage.
Which is to say that by elections or revolutions they overwhelm the bandit chief of the moment to replace him by another bandit chief who gives promise of more moderate ways. But moderation is not a strong point with bandits. And so the endless story is repeated, over and over again. People rise up and do away with one particular bandit, and fly to the arms of another for protection.
Such changes in the long run provide little in the way of actual change. Only the names are different. The practice of banditry is still the general rule. And it should be noted that this reliance upon banditry is a reliance upon physical force and violence, however friendly such force and violence can be made to appear at a given moment.
In relatively recent years, a new mode of protection has made its appearance, in the market place. Foregoing force and violence, the insurance idea was born. It was and is the contention of insurance experts, that men can secure protection by translating the protection desired into terms of money. Insurance men know that people cannot be protected against the inevitable. Fire, flood, storm, drought, accident and even death are always with us. The insurance idea is that the possible amount of damage can be calculated in advance in terms of money. The person desiring insurance can pay to the insuror a sum of money which in toto will be but a fraction of the loss he might experience if one of these dread enemies should strike. Then, altho he is still subject to disaster, he can indemnify himself against the frightful financial loss such disaster might represent.
This is a free market idea. The growth of insurance companies since the first marine coverage to the present time, is ample evidence that the idea of protection is marketable on a voluntary basis. Unlike the bandit chieftains, the insuror does not make his coverage mandatory. He indemnifies only those who patronize him. Those who wish to be covered, pay in advance. Those who do not wish to be covered, pay nothing.
But there is a notable difference in the manner in which each of these protection agencies functions. Surpluses collected by bandit chiefs are spent in a vast and lordly fashion on all sorts of silly and irresponsible projects. Surpluses collected by insurors are invested in free enterprise, thus enhancing the market place, increasing financial responsibility and otherwise strengthening freedom and voluntarism. The bandit chiefs still rely on force. The insurors rely upon arithmetic and logic and use no force. Yet, both sell protection. To us the voluntarism of insurance is vastly superior to any kind of banditry.
In the preceding editorial we have discussed two types of protection: that provided by bandits who make their protection mandatory once they have been hired and that provided by insurance companies which use voluntary, free market practices and protect only those who wish to be protected. And we have commented that to us the voluntarism of the insurance idea is superior to the involuntarism of banditry.
We might also show that with the passing of the last half century, the bandit idea, while sustained in most minds, has resulted in a mammoth debt of such magnitude that serious students are wondering if the sum can ever be repaid, whereas the insurance idea, while not universally adopted has resulted in such surplus that insurance companies are now among the largest repositories of funds throughout the world. Bandits, relying on physical force, have constantly betrayed their own payees. Insurors, relying on nothing but honesty and the voluntary way, have met their obligations cheerfully and promptly. This provides. a curious contrast.
It is clear that insurance is a successful and worthy enterprise. Grave questions have still to be answered as to the success and the worth of universal plunder even when such plundering is sponsored by our political friends.
So, in very recent times, the bandits have recognized the value of the insurance idea. And, having recognized it, they have turned to it to practice it. But in so turning they have retained their basic character. Thus nowadays, certain of our group of world bandits have sought to employ the insurance idea as their own. But they cannot rid themselves of the curse of compulsion. Thus, when our own group of political thugs undertook the largest and most expansive program of insurance in world history the Social Security scheme they brought to it their own ideas of banditry and made Social Security a matter of compulsion. Most were not asked if they wanted such government insurance. Instead, at the point of the tax gun, they were compelled to take it. And the money collected by our bandits was used just as any other money they collected. It was poured into any number of the numerous rat holes of political expediency maintained by the bureaucracy of banditry, so that our bandit insurance is naturally dependent upon its income from banditry and not at all upon its investments, which are nil.
Thus we see that a merger of an insurance idea with banditry is of little merit. But such a merger gives rise to the thought that it might be possible for the insurance idea, maintained without banditry, to be expanded into the areas now presumably protected by bandits. In other words, might we not ask if it is not possible that some of the vaunted protection we are still paying for from bandits could not be purchased in a voluntary manner from insurors?
If protection against fire, flood, accident and death can be purchased by those who wish such protection; why cannot those who wish it, purchase protection from the thief, the liar and the cheat? Perhaps, if we put our minds to it, we might even devise a type of protection which could be purchased from an insuror against banditry itself. Here is a thought to conjure with.
Perhaps it would not be so difficult an accomplishment as it now seems. If the protection furnished us by our bandit friends were to be placed on a voluntary basis, with each person paying for exactly the type and amount of such protection he deemed useful and wise, then the insurance idea would have, in large measure, supplanted the bandit idea. And what would be wrong with that?
It seems to us that civilization itself is voluntary association. Barbarism is involuntary association. Civilization begins with the first voluntary action. If it ends, it will end with the last voluntary action. And if we wish civilization to expand as well as continue had we not best be advised to study ways and means of supplanting compulsion with voluntarism?
Perhaps there are areas of protection open to us thru voluntary means which we as yet have not explored. Surely, it would pay us to commence the exploration. In the end, if necessary, we can always go back to the bandits. Why not try a superior way first? You know, it might work.