Risk Sharing Argument

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Posted by Julia from dhcp100030.res-hall.northwestern.edu ( on Tuesday, February 26, 2002 at 8:42AM :

In Reply to: Here's The Thing posted by pancho from ? ( on Tuesday, February 26, 2002 at 4:28AM :

In addition to what Fred said about needing full time leaders who can dedicate more than vacation time to the cause at hand, we need to consider and realize the importance of risk sharing as an organizational model that can help us accumulate and dispense resources we need to bring changes to the future...

the risk sharing argument is a simple one. take the case of insurance. instead of an employee working full time to cover all his medical expenses (an expense so variable that it can at certain times knock his whole income away), the employee can siphon fractions of his income and put it in a pool of money with other employee's contributions... in this way a pool of resources is created, and this can be used to pay health care and health treatment costs in such a way where the risk of having your income wiped out is decreased significantly, because everyone is assuming the cost of healthcare at a lower per capita price.

So, if our community emphasized some kind of risk sharing model in creating pools of resources, we would realize two benefits: 1) we would create resources that would probably be greater and more reliable than if we depended soley on individuals 2) we would allow individual contributors to not only create pools of resources, but also allow them to develop their cultural, human, or monetary capital. This would enable us to retain people who are not only working for a good cause, but who are also athletes, doctors, designers, artists, musicians, merchants, etc.

The taxing model comes into mind as well. We have people who pay pennies from their earned dollars to pay for roads, public health measures, bridges and similar infrastructure: we don't tell people to make their own roads or to process their own sewage systems.

By taking a little from a lot of people, we can channel resources to let them do what they are doing. Moreover, as those resources are siphoned off, we can let full timers have a greater hand in directing and leading how those resources are used.

-- Julia
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