Market Justice

Market Justice by Sauvik Chakraverti 

7 Apr 2006, 0000 hrs IST, 

The gross miscarriage of justice in the Jessica Lal case is symptomatic of the fact that Indian socialists have an extremely warped notion of the role of the state.

To liberals, the only role of the state in a free society is to go after the bad guys. Our socialists have allowed the criminal justice system to go to seed because to them this was never the most important aspect of the state's functions.

Unlike the state, the market is deeply interested in keeping us alive. The biggest firms in any market economy are insurance companies and they want their clients to live long and keep paying their premia.

These big firms can effectively substitute the state's justice system. Insurers today protect us from fire, theft, accidents, natural disasters and the like. To this must be added aggression.

If we pay premia for aggression insurance, we will be much more secure. How would a case like the murder of Jessica be handled then? Under free-market capitalism, Tamarind Court would not be an 'unlicenced' bar: There would be no licences at all.

Thus, the Ramanis would insure their premises, and the insurance company would insist they hire a good agency for private security. These private guards would ensure that a man with a gun is denied entry.

Whereas the police only reacts after a crime is committed, with insurance there would be a great deal of crime prevention.

If an armed assailant still obtained entry, and then murdered someone, these guards would be responsible for apprehending the assailant and handing him over to the insurance company.

The insurance company would first pay the family of the victim to the extent of the full sum assured. It would also pay the owners of Tamarind Court.

Then, it would exercise its rights of subrogation and make monetary demands on both the assailant as well as the private defence agency that failed to keep the premises secure.

These cases would be brought before a private arbitration agency, whose decision would be binding. The assailant would have to pay a lot of money to the insurance company, the victim's family and her employers.

Instead of the state meting out 'punishment' in the name of 'society', this would be 'justice' to the actual 'victims' of the tragedy.