Saturday, August 28, 2010

And we will find an undocumented alien to do your time

Okay, they won’t. But it’s a similar concept to this:
A couple weeks ago, I [Ian Ayres] became briefly fascinated and somewhat appalled by the appearance of a new Internet business that offered a sort of insurance against speeding tickets. In return for an annual fee of $169, promised to reimburse you for the costs of up to $500 in moving violations. Its webpage enthused:
  • We don’t promise that you won’t get a ticket; we just promise that you won’t have to pay for it.
  • Never pay another ticket again. Period!
  • Never pay late fees on tickets.
  • Never worry about speed traps or radar while driving.
  • Never need an expensive ticket lawyer.
  • Never have a take a day off work to fight a ticket.
    As the writer Ayres, a professor at Yale (there’s that school again!), says:
    The first reaction of any economist would be that faces an enormous moral hazard problem.
    o  O  o
    The first reaction of any lawyer would be that faces an enormous set of legal risks. Can you imagine the tort lawsuit that would arise if a customer killed someone while speeding? This is a contract that is likely to be void against public policy.
    But if we go back a ways in American history, we’ll find a time when you could buy your way out of military service or hire another to take your place. From a Civil War documentary on Voice of America:
    The law said a man who was drafted could stay out of the army by doing one of two things. He could pay the government three hundred dollars. Or he could pay another man to serve in his place. If a drafted man could not do either thing, then he must join the army or be shot as a deserter.
    Perhaps is a more traditional American idea than it first appears.

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