State Farm General Insurance Co. last week became the latest insurer to retreat from California’s homeowners market. The culprit isn’t climate change, as the media claims in parroting Sacramento talking points. The cause is the Golden State’s hostile insurance environment.
The nation’s top property and casualty insurer on Friday said it won’t accept new applications for homeowners insurance, citing “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”
Insurers aren’t prioritizing short-term profits. They are protecting their customers, investors and creditors. Mr. [Ricardo] Lara isn’t helping Californians by driving away insurers, which will reduce competition and force more customers into a state-established insurer of last resort (backed by insurers) that provides skimpier and more expensive coverage.
Florida last year passed legal reforms to help keep property and casualty insurers in the state. If Democrats in Sacramento believe their climate-change hype, they’ll strengthen the state’s insurance market rather than tilt at windmills.
Prompted by the enthusiasm for socialism among today’s young people, Mike Munger makes an excellent point about the translation-into-English of Ludwig von Mises’s pioneering 1920 paper “Die Wirtschaftsrechnung im sozialistischen Gemeinwesen.” Two slices from Munger:
With a prescient recognition of the core of the problem, Ludwig von Mises wrote an article entitled “Economic Calculation in the Socialist Commonwealth.” The challenge of the paper was to require advocates of socialism to apply their critiques of capitalism—including concentrations of power, lack of information, and scarcity to a planned economy, and to show specifically how planning might do better.
Mises expanded and refined his argument in his 1922 book, Socialism. Before Mises’ contributions, the primary debate had been over the “J.S. Mill question”: are people “good enough” for socialism? Since citizens will need to be motivated by serving the public good rather than pursuing their individual self-interest, “we” will need to create a “new man” to people this brave new world. But Mises redirected the debate in a more technical direction: Is it possible for a non-market system to perform all the necessary “calculations” to be able to achieve results as good as those provided by a market system that generates prices as measures of opportunity costs?
It turns out that the way Mises was translated was, and is, unfortunate. The original title of his 1920 article was “Die Wirtschaftsrechnung im sozialistischen Gemeinwesen.” The word “Wirtschaftsrechnung” can be translated literally as “the economic arithmetic,” so “calculation” is not unfair. But even a cursory reading of Mises, and later expositors such as F.A. Hayek, reveal that the problem is not “calculating” the solution to set of equations where the data are given; the whole point of market processes is that exchange in a system of enforceable property rights generates the data that the system can then use to coordinate the conflicting plans and purposes of millions of people, in widely geographically separated locations.
This apparently minor word choice—I wish Mises had used a form of “Generieren,” or “to generate,” instead—has created grave difficulties ever since. After all, if the data are given, but dispersed, what is necessary is computing power. And, unsurprisingly, that is exactly how Mises’ opponents interpreted his argument.
This mistaken interpretation of the Misesian “calculation” problem persists to today, and it’s getting worse. MIT economist Daron Acemoglu recently tweeted the question that is on many minds about knowledge and computational power.
What Acemoglu calls “Hayek’s argument” is actually Mises’ argument, reinterpreted through the Hayekian explanation of the role of prices conveying information about relative scarcity. Note: If the problem is “calculation,” then Acemoglu’s question is perfectly fair. Socialism is not impossible, it is just limited by the ability of society to replicate the function of the price system, gathering dispersed data and performing and updating calculations very rapidly. But that means that the function of markets is essentially mechanical, and there is nothing in principle that would prevent economic experts from solving this problem, with sufficient computing power.
But…wait, stop, don’t! The problem is not calculation of given data, but the generation of the data that would be required, but does not yet exist. An example will make it clear why this is true.
DeSantis’ insistence on overriding those private decisions belies his description of Florida as “an oasis of freedom” with a “business-friendly environment.” When it comes to vaccination and masks, he recently told John Stossel, Florida has “consistently sided with the individual,” which is accurate only if you ignore individuals whose business policies DeSantis does not like.
The same is true of the Individual Freedom Act, the Orwellian name of a Florida law also known as the Stop WOKE Act. Among other things, it purported to dictate private employers’ training practices, a provision that a federal judge blocked last year because it violated freedom of speech.
The data linking gas stoves to asthma is weak science. The links in article are trash science.