A role for government is to insure against every possible risk that markets do not cover, says Harvard Business Professor David Moss:
…one of the underpinnings of our living standards is government’s willingness to reduce risks by being society’s insurer of last resort.
This is because a notable flaw of the free-market system is the inability to create risk markets for everything.
“Most markets operate well, but one market which has never been nearly complete is the market for risk,” he said. “You can buy insurance in case your house burns down, but you cannot insure against the price of your house going down. Or against a decline in your wage or salary at work.
After reading this, I couldn’t help but to think about Hoppe’s Natural Elites, Intellectuals, and the State.