I hope our readers will read this, the new guest post (immediately below), as well as read what I've written on the topic on this blog and elsewhere. I also hope readers will read and sign the White House petition started by a friend of mine to initiate mandatory gun insurance.
There are a lot of possible ways that liability could be implemented, and many possible ways in which improvements to reduce our gun violence could be accomplished. One of the ways the Forbes article differs from any of the other sources I've seen is that it also factors in taxation on the basis of relative risk in conjunction with insurance as a means of letting the invisible hand of the market and capitalism create pressures to reduce gun violence.
From
Forbes:
Newtown's New Reality: Using Liability Insurance to Reduce Gun Deaths
We are all mourning now. Children should not be murdered in their
classrooms. They shouldn’t be afraid that their teacher will be shot, as
my 12-year-old daughter worries. Schools should not become armed camps.
Many of the low-hanging fruit approaches seem like no-brainers: Ban
assault weapons, gun-show sales, multiple-ammo clips and require longer,
more stringent background checks.
For the record: I’m not of the mind that every gun-owner
is a threat to society nor should we restrict gun use for hunters,
collectors and target shooters. My father owns guns, I have shot guns
many times, have known people who were murdered by guns and witnessed a
police shooting in 1981.
But I don’t think a widespread seizure of some 300 million American
weapons will ever work. In fact, just mention “gun control,” and the
very phrase shuts down conversation and invokes the vague rights and
curse of the second amendment. Challenges to the constitution would
never make it through the Roberts court, anyway.
What we
can do is to look at gun sales through the lens of social economics.
Market-based risk pricing is the partial answer. Let’s agree
that guns as weapons are inherently dangerous to society and owners
should bear the risk and true social costs. Translation: Require both
owners and sellers to purchase liability insurance that is universally
underwritten by actuaries according to relative risk.
Given that gun violence, which kills more than 30,000 Americans
annually, is harmful not only to our well being, but our economy, we
should use economic disincentives to regulate its use.
What Other Countries Do
In relative terms, gun deaths are out of control relative to other
kinds of fatal injuries. According to the Centers of Disease Control,
absolute numbers don’t tell the whole story. Gun-related fatalities are
nearly as high as traffic deaths, according to the
Centers for Disease Control, at around 10 per 100,000 in population. In England and Wales, there were
39 gun-related deaths (in 2008-2009). You do the math.
Of course, in the U.K.,
Japan
and other countries that have socialized medicine, guns are extremely
difficult to obtain. That directly reduces their acquisition and misuse.
Here’s what the
Economist had to say recently about the U.K.’s gun control measures:
“After a couple of horrible mass shootings in Britain, handguns and
automatic weapons have been effectively banned. It is possible to own
shotguns, and rifles if you can demonstrate to the police that you have a
good reason to own one, such as target shooting at a gun club, or deer
stalking, say. The firearms-ownership rules are onerous, involving hours
of paperwork. You must provide a referee who has to answer nosy
questions about the applicant’s mental state, home life (including
family or domestic tensions) and their attitude towards guns. In
addition to criminal-record checks, the police talk to applicants’
family doctors and ask about any histories of alcohol or drug abuse or
personality disorders.
Vitally, it is also very hard to get hold of ammunition. Just before
leaving Britain in the summer, I had lunch with a member of parliament
whose constituency is plagued with gang violence and drug gangs. She
told me of a shooting, and how it had not led to a death, because the
gang had had to make its own bullets, which did not work well, and how
this was very common, according to her local police commander. Even
hardened criminals willing to pay for a handgun in Britain are often
getting only an illegally modified starter’s pistol turned into a
single-shot weapon.”
What About the NRA?
Will America ever have gun laws that come close to England’s? I think
there’s a better chance of Ron Paul getting elected president. And
every politician proposing new gun laws has to run the gantlet of the
National Rifle Association and affiliated groups — and face the fear of
not getting re-elected. But is the NRA really that powerful? Paul
Waldman, writing in
The New York Times online, cites research that shows that Americans aren’t afraid of new gun regulation:
“Gun advocates note that when surveys ask broad questions on gun
control, more Americans say they are against it than for it. But that
can’t be a result of our national debate. The last time we really
debated the issue – in the 1990s – support for restrictions rose. But
after the N.R.A. successfully convinced Democrats that they lost
Congress in 1994 and the White House in 2000 because of the gun issue
(contentions contradicted by the
evidence),
Democrats retreated from the issue in fear. So in recent years, the
debate has sounded like this:
Gun advocates say Democrats are sending
jackbooted thugs to take away everyone’s guns, and Democrats assure
everyone they have no plans to do anything of the sort. So it’s not
surprising that support for “gun control” has fallen.
But public opinion looks much different when you ask people specific questions. Polls show that
majorities of Americans favor almost every restriction actually being
proposed to set limits on gun ownership. For example, the General Social
Survey has long found three-quarters of Americans saying everyone
should have to get a permit from the local police before buying a gun. A
Times/CBS News poll last year found 63 percent of Americans in favor of a ban on high-capacity magazines.” (bold is my emphasis added - DG)
So if Americans rose and demanded that public massacres were
unacceptable, what kind of gun regulation would make it through the
political sausage making? Outright bans are generally non-starters and
it’s unlikely that the constitution would ever get amended because red
states would never agree to dramatic restrictions.
Market Economics A Starting Point
When you buy a car, your insurer underwrites the risk according to
your age, driving/arrest/ticket record, type of car, amount of use and
other factors. A teenage driver behind the wheel of a Porsche is going
to pay a lot more than a 50-year-old house wife. A driver with DUI
convictions may not get insurance at all. Like vehicles, you should be
required
to have a policy before you even applied for a gun permit. Every
seller would have to follow this rule before making a transaction.
This is where social economics goes beyond theory. Those most at risk to
commit a gun crime would be known to the actuaries doing the research
for insurers. They would be underwritten according to age, mental
health, place of residence, credit/bankruptcy record and marital status.
Keep in mind that insurance companies have mountains of data and know
how to use it to price policies, or in industry parlance, to reduce the
risk/loss ratio.
Who pays the least for gun insurance would be least likely to commit a crime with it. An 80-year-old married woman in
Fort Lauderdale
would get a great rate. A 20-year-old in inner-city Chicago wouldn’t be
able to afford it. A 32-year-old man with a record of drunk driving and
domestic violence would have a similar problem.
What about “straw purchasing” where someone buys a gun or gives it to
someone else? The original purchaser not only would be required to have
insurance, but would be liable for any violence committed with the
weapons they purchased. The insurance companies could keep these
records, which they are really good at doing. How do I know this might
work?
Insurers have been doing this for centuries in underwriting health,
auto, home and life insurance. Instead of charging the highest premiums
for overweight smokers, alcoholics with bad driving records and
dangerous hobbies, the most expensive policies will be priced for those
who are younger with histories of mental illness, divorce, criminal
records or severe financial difficulties.
In lieu of widespread bans and confiscation, most people in an industrialized society generally accept the need for insurance.
While I don’t necessarily think that insurance underwriting is always
fair — they often deny insurance to the chronically ill — it’s an
economic way to address a horrendous problem. The point is, when you
apply for insurance, you would give the insurer the right to search your
health and financial records and actuaries would be able to develop
risk factors and apply premium pricing. As I wrote in a
Reuters blog last year, gun insurance could save a lot of lives, if applied universally:
“Risk-based pricing is fueled by a whole body of research that
identifies who might be a victim in a gun crime or accident…Far too many
kids are at risk: Some 90,000 children were killed by gunfire between
1979 and 2001, according to the Children’s Defense Fund. That’s almost
twice the number of soldiers killed in the Viet Nam war. In fact,
American children are more at risk from firearms than any other industrialized country.
If you think that the mandatory insurance idea is onerous, think
again. You can’t finance a home mortgage without homeowner’s and title
insurance. Want to buy a car? Most states require liability insurance.
Forget about employing anyone in most states without worker’s
compensation or unemployment coverage. As it stands now, only 22 cities
and two counties in California require gun dealers to buy liability
insurance, according to
Law Center Against Gun Violence.
It’s not known if any jurisdiction requires buyers to purchase
liability coverage, although a state legislator in Illinois proposed
such a law in 2009 (it was defeated). Note: the NRA itself currently
endorses
“excess liability” insurance for gun owners.”
While I don’t place much faith in government being a fair regulator
of guns, I also think that a tax should be imposed on weapons sales
based on the relative harm they can do, which is again employing
risk-based pricing.
Want to buy a single-shot World War II rifle? You’d pay much less
than a semi-automatic handgun with a multi-round clip. The tax would be
used to pay for a database that would monitor and register gun sales.
Also requiring a longer waiting period for a permit and requiring that
three non-relatives sign character affidavits during the permit process
aren’t bad ideas, either.
Of course, I’m not sure how to stem the underground trade of guns
other than enforcing outright bans on unregistered weapons. Nor will my
concept keep guns away from criminals; insane people may still find a
way to get around buying insurance and sidestepping the underwriting.
But it will raise the bar for the liability threshold. It will cost you
dearly — or prohibit you from getting insurance
and a gun — if an insurer deems you uninsurable.
Insurance will more effectively price the risk and costs of social
harm. I know that this falls short of getting rid of the most dangerous
weapons, but we have to start somewhere. We just can’t afford to see any
more Auroras, Columbines, Tucsons and Newtowns.