THERE IS A BASIC DIFFERENCE BETWEEN INSURANCE and socialism. Insurance is protection against risks that are unpredictable for individuals but predictable for a larger group. You don't know whether your house will burn down next year, but we can know roughly how many houses will burn down across the country. This combination of unpredictability in particular and predictability in general is what makes insurance a business.

Socialism goes further. It protects against risks that are predictable even in the individual case. Socialism, of course, is a dirty word. Nevertheless, we all accept, to varying degrees, the desirability of a social safety...

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