Freedom, Society, and State - Ludwig von Mises Institute

"Coercive acts are destructive of values," note the
Tannehills, "and value-destruction is expensive for
insurance companies." Consequently, not only would
insurance policies "probably specify certain standard
protective measures which the insured must take in
order to buy at the lowest rates -- burglar alarms
connected to the defense company's office, for
example," but
Policies would also state that the insured
mus t buy hi s protect ion from a defense agency
which met the standards of the insurance company,
to avoid having him hire an inefficient
or fly-by-night defense agency at a cheap
price while counting on his insurance to make
up for any loss which their ineffectiveness
caused him.
Thus, it is held,
Insurance companies, without any resort to
physical force, could be a very effective
f act or i n b r i n gin g an un r u 1y de fenseage n c y
to its knees via boycott and business ostracism.
It would be difficUlt, indeed, for
any defense company to sur v i vei f the major
insurance companies refused to sell insurance
not only to it, but to anyone who dealt with
it. Such a boycott would dry upa major part
of the defense company's market in short
order; and no bus iness can survive for long
wi thout customers. There would be no way for
a defense agency to break such a boycott by
the use of force. Any threatening or aggress
i v e act ion s towa r d the ins u rance compan i e s
involved would spread the boycott as other
bus i n e ssesandind i v i d ua Isat t empted to s t a y
as ,far away from the coercive agency as
possible.(72)
The p 0 S sib iIi t Y 0 f col Ius ion am 0 ng s ever a 1 agen -
,cies would not alter the situtation. The anarchist bel
ieves that there would be numerous agencies operating
in the protect i on area. We have seen that there are
goo d rea son s, bot hana 1y tica 1 and em p i ricai, for t his
bel i ef. Thus, even if a Mafia Cartel were formed, the
pre senceofin d e pendentage nc i e s wo u 1d mo s t ass ured 1y
bring about its quick collapse for the reasons already
discussed.
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