Why insurance doesn't work

Shelby Thu Sep 08, 2011 9:47 pm

http://esr.ibiblio.org/?p=3689&cpage=5#comment-322050

Shelby wrote:

Insurance is indeed a collectivist idea, a voluntary association. No force, no taxes, just people working together to manage their risk. It is a beautiful thing

I am undecided about this catastrophic insurance concept. I understand the logic that if x% of the population will have a claim in their lifetime, thus it is lower risk for all of us to pay x% into a pool, than for x of us to be bankrupted.

Problems:
1. A collective pool breeds claims corruption.

2. Every detailed actuarial analysis of insurance I've done, mathematically supports that on the statistical aggregate, everyone would have been collectively wealthier investing the money individually. Since wealthier societies can afford more charity, I think catastrophes should fall to charity.

3. Catastrophic insurance causes people to change to more risky behavior, because they think their risk is someone else's problem.

4. Who bails out the insurance company? (we all do).

Etc. I have some where about 20 points I had done on this long ago. I eventually realized there is a fundamental math to all such things that involve collective promises. This had a profound effect on my philosophy, since I like math.

http://esr.ibiblio.org/?p=3689&cpage=5#comment-322063

#Jessica Boxer Says:
> If you don’t want it, don’t buy it, just don’t interfere with my right to buy it.

Agreed. As far I know, I have NEVER advocated collective force to prevent anything. I mean that I am undecided whether catastrophic insurance is rational.

> Which shows that you don’t even understand the purpose of insurance.

Which shows you don't read, because I wrote, "I understand the logic is...thus it is lower risk for all of us to pay x% into a pool, than for x of us to be bankrupted". I am just analyzing, no need to push us to ad hominem emotions.

> It is trading a lower average return for a lower risk or below average return

And I am explaining that is a mathematical fallacy, because uniform distributions are FAIL in nature ALWAYS, because perfection has an infinite asymptotic cost. Random individual outcomes are required to anneal (globally optimize) fitness of overall outcomes, because it is the only global optimizer that works when one can't know the structure of the problem a priori.

So when you remove the small risk of outliers, you fight against global optimization, which leads to the 20 ways that insurance leads to collectivism creep, and results in a big morass like what we have now in the western world. It is no accident that we are in a debt bubble, people love to promise about the future. That is a fundamental quality of collectivism, and it is always a FAIL and a LIE.

Either you are free market, or you are not, similar to how a woman can't be a little bit pregnant. And the reason is not subjective, it is based in the math that controls outcomes. That is the math of the probabilistic organization of all matter in our universe. That is entropy. You will find the equation for entropy in every discipline of the sciences, even biology. In fact, even computer science, but I can't write a treatise here on that to connect the continuum hypothesis, halting theorem, Godel's theorem, etc.

> charity is going to pull your butt out of the fire, how exactly is that any different?

Charity is not a future promise. It is something someone does of their own free will based on the current reality, not some future reality which no one can know a priori. The mathematical problem with insurance is that it impacts the future reality, such that it removes all the protective power it was designed to create. Because the future adjusts to the economic incentives it was presented with.

The point is that no one can guarantee that we will be able to recover from catastrophe. When we get there, we will know what resources we have available. And if we didn't waste our resources on collective foolishness, we will have more to drawn on.

> I think people should take responsibility for themselves as much as is possible.

Exactly. Since I know I don't have medical insurance, I exercise a lot and eat raw whole foods. Those with insurance may not be so disciplined about their health.

> in all successful insurance programs [risk] it is [factored in].

You know where this leads? A device attached to your body to monitor eating, etc.. I told you this is where collectivism is going, because people never learn about this math. And how much prosperity does that create, as compared to one where people willing take responsibility instead of needing forced monitoring.

> But you want us all to bail out anyone who has a catastrophe!

No, unlike insurance, there is no promise. You bailout if you want to. And (on the statistical aggregate) you will have more excess wealth to do so, because you avoided the LIE of insurance.

These things are simple for me to grasp, but so difficult for most people. I don't know why.

http://esr.ibiblio.org/?p=3689#comment-322134

Shelby wrote:

@Tom DeGisi:
My answer to Jessica’s “20 ways” question about my assertion that insurance begets wider scale collectivism, is quite simple. First the reader must understands the various comments I have been making (in the past few blogs) about passive capital. Then note that a pool of insurance money is passive capital. If someone wants to explore that rationally, I am willing to go deeper into that logic. I can try to collect my logic and see if I can reduce it to a set of simple, concise statements. I have linked passive capital in a broad theory of history, from feudalism up to what I believe is causing current day events with the declining industrial era.

@Tom DeGisi:
Note that passive capital is dead money, because stored capital is always losing value unless it is actively invested. But the only way a collective body can invest, is via debt, because the whole point of active investment, is that individuals compete on ideas about resource allocation. I can take that logic much deeper, if there are some readers who are sincere. It is very far from “nonsense”.

More here on what is passive capital and the problem with it:

https://goldwetrust.forumotion.com/t44p75-what-is-money#4580

Shelby Fri Sep 09, 2011 4:05 pm

Someone has proven my Theory of the Universe (Gravity), which validates what I have been writing about the entropic efficiency of the organization of things in our lives:

https://goldwetrust.forumotion.com/t124p15-theory-of-everthing#4581

Shelby Sat Sep 10, 2011 4:21 am

http://esr.ibiblio.org/?p=3689&cpage=6#comment-322318

In case my overall point about insurance somehow is still not clear, the point I raised is that the lender is no less economically (not talking morals here) culpable in the contribution to declining entropic efficiency caused by debt, as debt pulls forward demand and stimulates more uniform distribution, which is what I referred to as "mayonnaise", trying to draw the analogy to something that hides the diversity of flavor. I said I am undecided as to whether losses in entropic efficiency due to the passive capital of catastrophic insurance is a detrimental enough to outweigh the individually self-interested benefit. My concern is I think the systemic entropic efficiency losses are self-reinforcing, meaning that a little bit of it, drives more of it, and there is no natural limiting balance. But I have not yet been able to make this part of my concern irrefutable.

Here is an inspirational link which is an example that humans can be naturally charitable, when they have excess resources. Here they go out of their way, by their own free will, to give their own blood to solve a dire emergency. I suppose this is an example of the gift economy that Esr mentions in the Magic Cauldron.

Shelby Mon Sep 12, 2011 7:52 pm

http://www.bbc.co.uk/news/science-environment-14855666

British flowers are the source of a new cancer drug
By Leila Battison
Science reporter

Natural Health and Gods Healing - Page 2 Smartb10

The "smart bombs" do not begin to act until they reach tumour tissue

Extracts from the Autumn crocus are already used to treat gout

The search for more effective cancer treatments may soon harness the healing power of the Autumn crocus.

Researchers are poised to start clinical trials with a new "smart bomb" treatment, derived from the flower, targeted specifically at tumours.

The treatment, called colchicine, was able to slow the growth of and even completely "kill" a range of different cancers, in experiments with mice.

The research was highlighted at the British Science Festival in Bradford.

The team behind it, from the Institute for Cancer Therapeutics (ICT) at the University of Bradford, has published the work in the journal Cancer Research.

The native British Autumn crocus, otherwise known as "meadow saffron" or "naked lady", is recorded in early herbal guides as a treatment for inflammation.

This is because it contains the potent chemical colchicine, which is known to have medicinal properties, including anti-cancer effects.

But colchicine is toxic to other tissues in the body, as well as cancer, so until now its use has been limited.

The researchers at ICT have now altered the colchicine molecule so it is inactive in the body until it reaches the tumour.

Once there, the chemical becomes active and breaks up the blood vessels supplying the tumour, effectively starving it.

This effect is made possible because of enzymes that all tumours produce, whose usual function is to break down the normal cells nearby, allowing the tumour to spread.

The modified colchicine molecule has a protein attached to it that makes it harmless. But the tumour enzyme specifically targets the protein and removes it.

The colchicine is then activated, and the process of breaking down blood vessels and starving the cancerous cells begins.

Optimistic but cautious
One of the things that may make this drug so effective, Professor Patterson said, is that it will be "only active in the tumour, and not cause damage to normal tissue".

Because the enzyme necessary to activate the toxic colchicine is produced only by solid tumours, it may be possible to treat cancers effectively with virtually no side effects to the rest of the body.

The "smart bombs" do not begin to act until they reach tumour tissue
Moreover, as the drug will be activated wherever the enzyme is produced, the delivery mechanism should allow treatment of particularly problematic cases of metastasis, where the cancer spreads from its initial site.

Pre-clinical tests in mice have shown startlingly successful results.

"What we're looking for is a delay in the growth of the tumour," said Professor Patterson.

"But sometimes the treatment is so effective that in half of the studies, the mice appeared to be cured of their cancer. All mice responded to the treatment."

Just one dose of the colchicine produced this remarkable effect. But if it passes clinical tests, the researchers believe it will be used alongside existing cancer treatments, as part of the complex process of tackling the disease.

The researchers hope that the treatment will enter the initial stage of clinical testing at St James's Hospital in Leeds within the next 18 months.

Professor Patterson said that he was "very optimistic about the opportunities of the treatment, but still cautious because everything done to date has been in the laboratory".

Paul Workman, head of cancer therapeutics at the Institute of Cancer Research, called the work an "interesting new approach".

"The project is still at quite an early stage but the results so far look promising in the laboratory models that have been studied," he said.

"If confirmed in more extensive laboratory studies, drugs based on this approach could be very useful as part of combination treatments for various cancers."

http://www.dailymail.co.uk/health/article-2036279/Crocus-drug-kill-tumours-treatment-minimal-effects.html

just eat Apricot kernals instead full of B17,,,and with NO known side effects
- Donovan, Norfolk England, 13/9/2011 2:33

I have used colchicine MANY, MANY times treating patients with gout and ruptured disc. The drug is dirt cheap and when taken as directed, is very helpful. I have administered colchicine via IV infusion for years and found it to be a safe product when used according to direction. I welcome a new use for an old, natural drug.
- Dr. H. William Winstanley, Marshall, MI USA, 13/9/2011 0:59

In your situation Mike, I would be buying pure saffron strands and using it in food. I would also be drinking Bicarbonate of Soda and Apple Cider Vinegar in warm water 2 or 3 times a day. I would also be taking Oil of Oregano (a couple of drops under the tongue) daily. What have you got to lose? All these things are harmless, but may help. Good luck.
- J Robinson, West Midlands, 13/9/2011 0:23

There are many natural cures for Cancer. Google Gerson. That's just one! Conventional medicine have been obfuscating cures for years. why? Follow the money!
- David, Jersey, 13/9/2011 0:10

A cure was discovered in the 50s and suppressed by "Organised Medicine" - the pharmaceutical companies because it can't be patented It's vitamin B17, or Laetrile in its concentrated form, found in peach/apricot seeds, bitter almonds, amongst others It both prevents and cures cancer. Search Youtube for "World without cancer", by G Edward Griffin Decide for yourself
- Galahad Threepwood, Blandings, 12/9/2011 23:21

Why not inject natural colchicine directly into the tumour, so leaving out the expensive middleman gene chemist? Simples!
- Flatcap, Birmingham Yoo Kay, 12/9/2011 22:53

This has been used for this for hundreds of years. It is used for gout to this day and since it is easily available is not expensive. Maybe a few brave doctors will prescribe it for cancer patients and see what happens.
- Flatcap, Birmingham Yoo Kay, 12/9/2011 22:52

OK so it works on cancer but it will never be produced for the public because it is a natural substance and A NATURAL SUBSTANCE CANNOT BE PATENTED So drug companies can't charge us the earth for it.
- FRANK, SLOUGH, 12/9/2011 22:16

The article states that colchicine is too toxic for use in humans, but it is actually commonly used by your GP to treat gout! It may cause diarrhoea but as a side effect, but is otherwise quite benign.
- Tahir, London, 12/9/2011 22:08

Amazing if it works, no more post code lotteries playing with peoples lives either! that is amazing. - Dolly, Northwest, 12/9/2011 7:49 Saffron comes from croci. How much does saffron cost? How much will this drug, if it ever is developed, cost?
- False hope, Yet again, 12/9/2011 21:40

An ingredient in cannabis cuts tumor growth in common lung cancer in half and significantly reduces the ability of the cancer to spread, say researchers at Harvard University who tested the chemical in both lab and mouse studies.........that was years ago so don't hold your breath!!
- Graham, Scotland, 12/9/2011 21:25

yes i also believe the cure is out there in a plant somewhere.But what annoys me is when they boost the hopes of people with cancer then say it will not be ready for eight years WHY they certainly get plenty of money of all the money collected for charity they get thousands And other terminal illnesses are put on the back burner like lung deseases that have not progressed in forty years
- jose, NorthamptonY, 12/9/2011 21:13

Even if this drug, derived from colchicine, was found to be safe for humans & it was then brought to market, you can bet that the National Institute for Clinical Extermination, would find a way of banning its use within the NHS. NICE will tell cancer sufferers & their doctors that the drug is too expensive, or that its efficacy is doubtful.
- Emma.D, Somewhere Only I Know, 12/9/2011 21:00

"The first tests on humans could start in as little as 18 months. If successful, the drug could be on the market in six to seven years." WHY??? If someone is dying and wants to try this then let them. Funny how it is always 5, 7 or 10 years and that it NEVER seems to come around. I just love how the drug is described as "dangerous". If that is the case how ould the "experts" describe Chemotherapy?? These drugs are highly toxic and certainly NOT selective in the cells they kill. Also, time to demolish the conspiracy against the un-patentable cancer-kiler, Amygdalyn.
- The Punisher, Darlington, ENGLAND, 12/9/2011 19:42

Yes wrong crocus picture. It should have been Colchicum Crocus which are the Autumn flowering variety.
- Millsybabe, Birkenhead, 12/9/2011 19:10

The picture shows the common variety of spring crocus, but the text tells us the drug is derived from the autumn variety, a colchicum autumnale I think, & looks very different from the picture.
- Olde Janner, South Devon, England, 12/9/2011 17:30

My grandmother always told me that saffron could help with some cancers.
- Alfred, Herts, 12/9/2011 17:09

If there is no money in it - then there will be no cure in it !! This idea / research and all - will be buried along with all the other similar such discoveries!! Bicarbonate of soda v cancer - is blazing a trail across the internet at the moment. Even if the idea had any substance - its way too cheap!!
- Suzy, UK, 12/9/2011 16:50

Your photograph is of CROCUS. It should be of COLCHICUM, the autumn crocus which is quite different. Consult your experts please.
- A.P.H., East Sussex. U.K., 12/9/2011 16:01

a while ago I was given a drug derived from the Crocus plant to relieve my Gout, it did this , but the side effect was very..very loose bowel movement....oh my goodness...
- victor michael arram, westcliff, 12/9/2011 14:53