Fun with Public Goods Theory

I just wanted to recommend a Swiftian piece by Slate’s Tim Noah, entitled “Would You Privatize National Defense?” Here’s a taste:

Suppose the national defense of the United States were relegated to the private sector. Instead of the publicly funded Army, Navy, Air Force, and Marines, the country would be defended by private militias funded mainly by insurance companies. In the event of foreign attack on U.S. soil, the militias would defend those citizens in the affected areas who’d paid defense insurance premiums through their places of work (or, if self-employed, as individuals). The best-armed troops would defend the wealthiest and most hawkish segments of the population, who would have paid the highest premiums.

Noah spins the idea out along some very fun lines; one advantage of the plan would be that “[e]very citizen would receive an individualized amount of military protection, based on the value each of us placed on defending the homeland.” And of course, to the extent there were problems, “market purists would blame [them on the] inherently inflationary nature of third-party insurance payments and would argue for increasing the portion of national defense paid out of pocket in order to discipline buyers and pressure the private militias to get their expenses in line.”

Well worth the read (or podcast–Slate’s have been consistently good for some time).

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