Comment by _heimdall
4 days ago
Why do the laws exist if its better for (almost) everyone involved? Without the laws why would people not do it that way if its the better approach?
4 days ago
Why do the laws exist if its better for (almost) everyone involved? Without the laws why would people not do it that way if its the better approach?
Many laws solve the problem of high initial cost dissuading globally good actions. Laws forcing everyone to buy insurance, for example. It's very easy to see that where such laws don't exist, almost no one buys insurance, making everyone worse off.
This is also an example of the same kind of law.
Insurance is an interesting example, I would have expected one that causes more direct harm to others like drunk driving.
How are we all worse off when fewer people have insurance?
Healthy young people are less likely to buy insurance than sick older people. But if only sick older people buy insurance the payouts per insured are going to be higher. That in turn causes high premiums. Insurance works if everyone buys in, pays while they are young and relatively healthy, and gets paid healthcare when they are older and sicker.
If you “game” it, it breaks the whole system.
Now some of you might be thinking “why should a young and healthy guy like myself subsidize the old sick people?” The answer is that you will also get old.
2 replies →
Think of something like home owner insurance. Your insurance rates depend on exactly how your home is built, what type of heating system it has, where it is, etc. The rates, carefully calculated by actuaries, act as a signal to you as to how dangerous your house is to yourself, but also to others. If you set your house on fire due to negligence and cause the next house to burn, you might be liable for damages there as well.
Forcing everyone to buy such insurance forces everyone to fully pay for the expected cost of the danger inherent in their house. Over time, this causes houses to be constructed in a safer manner. If people are not forced to buy insurance, they don't buy it, and so this evolution over time does not happen. Also see [1].
Some financial tools are amazingly clever - whether they are morally good or bad. Bits about Money is a great blog to build insight into some of these constructions [2].
Another example for your initial question is car seats for kids. If you don't force em, nobody buys em. Then their kids die.
[1] https://en.wikipedia.org/wiki/Moral_hazard
[2] https://www.bitsaboutmoney.com/
3 replies →
Norway has very strict pro-workers laws in general, it's just one facet of them. One Norwegian explained it to me like that: in the late '60 when Norwegian oil industry started developing, workers realized that they can incur great losses on the companies if they organize/unionize and strike together. They used that as a leverage to both change their contracts (to include paid sick leave and such) and also get better working conditions (Norwegian platforms have both better safety and on platform to on land ratio).
And later other trades did the same. Some of the things in contracts trickled down to the law. But still some laws apply only to companies where at least a certain % (is it 50%?) are unionized.
The general picture is more or less like that, but please verify the details.