The Guardian has an article on an EU ruling banning the use of “gender discrimination” by car insurance companies. Unfortunately, this is very bad for women under 40 who, it is speculated, can now expect their insurance premiums to rise anywhere from 300 to as much as 2,000 Euro in order to match their male counterparts.
While I’m sure that the policy makers’ intentions were good, looking to end sexism, this is precisely the kind of market manipulation by government that not only does not accomplish what it proclaims to but also leads to serious negative consequences.
It has become the objective of policy makers both here in the United States and in Europe to end discrimination. But not all discrimination is created equal. There is unjust discrimination and then there is just discrimination. The former is characterized by hate and bigotry while the latter is characterized by a person or persons choosing some thing or person over another or one particular action over another based on economic or moral decision making, or even simply preference. Everyone discriminates everyday. We discriminate between which color shirt that we are going to wear, between different food options for breakfast, and employers discriminate between which applicants that they will hire, sometimes unjustly, based on emotional reactions of hate or bigotry, but most often justly on who they think will make the best employee based on experience, sure, but also things like eye contact, whether or not they followed up the interview with a thank you letter or even, yes, on sex – and that can be just if, for example, the job requires a lot of physical exertion that a man would likely be able to do more effectively.
When I say that I want to date a Catholic woman my own age I am discriminating. In fact, right off the bat I am discriminating against the religion, sex and age of everyone who is not a young Catholic woman. The solution is not a government mandate demanding that I give wrinkly old men an “equal opportunity” in my love life. In fact, there is no solution at all, because there is no problem to begin with: not only am I doing nothing wrong but I am engaging in a basic, natural practice necessary to living life, that is, discriminating.
On a deeper level, we must discriminate between what is Good and what is Evil – an ever increasingly rebellious act in our relativistic-minded world.
But back to the issue of insurance: just discrimination is essential to providing the service of risk reduction, which is what insurance companies do. Without being able to tailor their product to the individual or to adjust premiums according to individual characteristics insurance companies cannot respond appropriately to the particular risks unique to any given individual. A one-size-fits-all approach mandated by government results in higher prices and poorer quality goods and services (in this case less reduction of the individual’s risk, that is, less protection against unforeseeable catastrophe). We must charge men more for car insurance, not because they are men but because men engage in riskier driving behavior and, as a result, have more car accidents/worse car accidents (as statistics clearly tell us) making them more expensive to insure – another way of looking at it is that more risk reduction must be provided to men than to women by the insurance company which costs more so more must be charged in order to cover the additional cost of service. The fact that costs equalize between men and women starting around age 40-45 further suggests that this is an example of just discrimination and not sexism (unless of course the CEOs of all car insurance companies just really hate young men between the ages of 16 and 39).
If this is taken to an extreme like it is in the “universal healthcare” of Obama the result is that, with state mandates eliminating virtually all private discrimination, setting prices and even deciding what must be covered for everyone, what insurance companies are providing is no longer insurance anymore because it has nothing to do with reducing people’s risks. Instead, in addition to the unpredictable catastrophes that insurance is supposed to cover, insurance companies must cover every-day, predictable and often optional health costs like yearly check-ups and birth control pills, often at controlled prices and without any of that icky discrimination (“being a woman is no longer a pre-existing condition” as the rhetoric goes). The result is that insurance ceases to be insurance and instead becomes nothing more than welfare dispensaries for the State at which point it ceases to provide a service and serves only to move money around, usually in a less efficient and more wasteful way than a free market would. Ultimately, the plans to regulate insurance to such an extreme boils down to the reactionary and senseless action of “throw money at the problem.” This kind of policy enforced by Obamacare only hemorrhages an already anemic economy here in the United States.
In a free society people must be allowed to discriminate. It is how we choose between alternatives and how we develop unique solutions to unique problems. When government interferes with this process people are instead forced to employ the state-mandated one-size-fits-all solution, they cannot be as effective in their decision-making, and more people suffer as a result. Today, do yourself a favor: discriminate.