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W.A.C. Bennett grew tired of the company’s obstinance. In August 1961, after rumors of a potential takeover had circulated within the province for months, Bennett introduced the Power Development Act into the legislature in order to confiscate BC Electric for C$111.0 million. The bill passed unanimously, allowing the government to seize control of the utility. The move was highly controversial, sparking an uproar within the business press, with some overly dramatic papers even labeling Bennett a dictator. In an unfortunate coincidence, the head of British Columbia Power and BC Electric, A.E. “Dal” Grauer, had passed away a few days earlier, and his funeral transpired on the very same day the government took over the company he had led.184 In addition to taking BC Electric, the bill offered to buy the rest of BC Power for C$68.6 million, with interest accruing on this amount until the offer expired at the end of July 1963. Combined with the C$111.0 million paid for BC Electric, this offer would result in a total payment for all of BC Power’s operations of C$179.6 million—or the equivalent of C$38.00 per share. Bennett justified this price by highlighting that the proposal was a premium to the C$34.75 price the shares sold for the day before the expropriation.185 While the combined price of C$38.00 per share was reasonable, the valuation for the constituent parts was peculiar. The C$111.0 million price for BC Electric matched its paid-in capital but ignored the other C$28.6 million of common book equity. And this amount sidestepped the debate over whether book value was even an appropriate methodology for the utility in the first place. The C$68.6 million price for the rest of BC Power’s assets was even odder since these remnant assets generated no income and were carried on the balance sheet at only C$4.0 million. This was a clear overpayment for the holding company’s assets, proposed to entice it into consenting to the BC Electric takeover.186 Predictably, BC Power did not stand idly by. After preliminary attempts to negotiate a higher price were thwarted, the company took action in the Supreme Court of British Columbia on November 13, 1961. BC Power sought rulings on the validity of the initial Act, the right to additional compensation, and the convertibility feature of debentures issued by BC Electric (more on this last point in the next section).187 While the parties awaited trial, the government took additional steps to further entrench the takeover. At the end of March 1962—nearly eight months after the original seizure—the British Columbia legislature passed two new statutes. The first was the province’s amendment of the Power Development Act, which paid an additional C$60.8 million to BC Power for BC Electric and eliminated the offer for the rest of the parent company’s assets. Table 1 shows that the amendment didn’t significantly alter the total compensation. But the new consideration was a more realistic number for BC Electric and solved for the peculiar offer for the remaining assets, which BC Power would now have to sell themselves.

I was recently reminded of one possible reason that so many therapists are so insistent on arriving at a clinical diagnosis, and, not surprisingly, it’s directly related to problems with the health care system in America. A licensed professional counselor who has worked in the mental health field for many years wrote to say that even though she grew up in a family who strongly believe in the paranormal and in their own psychic gifts, “working with [psychic] kids is definitely a challenge in a pure clinical practice since this is not something you can bill insurance for.” Her point is very valid. Medical and mental health professionals must provide a clinical—and billable—diagnosis in order to receive payment from insurance companies. It is frightening to imagine how many children have been misdiagnosed, mislabeled, and mistreated because of the need to satisfy insurance guidelines!

Picture a small South American dictatorship, weakened by economic stresses and a popular demand for more freedom, resulting from the existence of a laissez-faire society nearby. What would the dictator of such a country do if faced by a large and powerful insurance company and its defense service (or even a coalition of such companies) demanding that he remove all taxes, trade restrictions, and other economic aggressions from, say, a mining firm protected by the insurance company? If the dictator refuses the demand, he faces an armed confrontation which will surely oust him from his comfortable position of rule. His own people are restless and ready to revolt at any excuse. Other nations have their hands full with similar problems and are not eager to invite more trouble by supporting his little dictatorship. Besides this, the insurance company, which doesn’t recognize the validity of governments, has declared that in the event of aggression against its insured it will demand reparations payments, not from the country as a whole, but from every individual directly responsible for directing and carrying out the aggression. The dictator hesitates to take such an awful chance, and he knows that his officers and soldiers will be very reluctant to carry out his order. Even worse, he can’t arouse the populace against the insurance company by urging them to defend themselves—the insurance company poses no threat to them. A dictator in such a precarious position would be strongly tempted to give in to the insurance company’s demands in order to salvage what he could (as the managers of the insurance company were sure he would before they undertook the contract with the mining firm). But even giving in will not save the dictator’s government for long As soon as the insurance company can enforce noninterference with the mining company, it has created an enclave of free territory within the dictatorship. When it becomes evident that the insurance company can make good its offer of protection from the government, numerous businesses and individuals, both those from the laissez-faire society and citizens of the dictatorship, will rush to buy similar protection (a lucrative spurt of sales foreseen by the insurance company when it took its original action). At this point, it is only a matter of time until the government crumbles from lack of money and support, and the whole country becomes a free area. In this manner, the original laissez-faire society, as soon as its insurance companies and defense agencies became strong enough, would generate new laissez-faire societies in locations all over the world. These new free areas, as free trade made them economically stronger, would give liberty a tremendously broadened base from which to operate and would help prevent the possibility that freedom could be wiped out by a successful sneak attack against the original laissez-faire society. As the world-wide, interconnected free market thus formed became stronger and the governments of the world became more tyrannical and chaotic, it would be possible for insurance companies and defense agencies to create free enclaves within more and more nations, a sales opportunity which they would be quick to take advantage of.

Insurance works when the insurance company honors a simple promise: When a policyholder files a claim, the company will pay what it owes, no more but no less, and will do so promptly and fairly. Insurance doesn’t work when the company breaks its promise in order to increase its profits.Insurance doesn’t work when companies delay, deny, defend. When they delay payment of claims to wear down claimants and to increase their investment income, flat-out deny some valid claims in whole or part, and defend against valid claims in litigation to back up the delays and denials, they break their basic promise.