More on That Fire

By now everyone's probably familiar with the Obion County fire incident (if not see here). It has led to a debate about Libertarianism and how, supposedly, awful it is that the fire was not put out. Many have defended the position by pointing out how the insurance system works.

Yesterday I blogged on this point and a commenter called fraser pointed me in the direction of this post on Mises.org. That post argues that this was not the free market in operation because in the free market they would have put out the fire and sent the bill afterwards:

In a real market, there is no way that a free-enterprise fire service would have refused to provide the homeowner service. They would be in business to provide that service. The fire would have been put out and he would have been charged for the service. It is as simple as that. It is the same as lawn-mowing services or plumbing services or any other type of service.

Now, it is certainly true that I am not anywhere near as intelligent or learned as those guys but I think they're wrong here. There is a big difference between the services mentioned in their post and fire services, the difference being the cost. For some services it is entirely reasonable to pay after the fact but not for the fire service. It's just too expensive for most people.

The London Fire Brigade, for example, had an operating cost of £422.3 million in 2008/09. In that year they dealt with 138,385 incidents. Of those 29,215 were fires, 64,374 were false alarms and 44,352 were other non-fire related services. I assume that the cost of putting out a fire is much larger than the cost of dealing with a false alarm or freeing someone from a lift. So some quick calculations - if all services were charged the same the cost per incident would be about £3,000. But in reality putting out a fire would be much more, say at least £10,000.

How many people could afford to pay that after their house is damaged by a fire? Not many I suspect. So in reality, I think, a private fire service may well refuse to put out some fires on the basis that they cannot make any money doing so. Certainly there will be some fires that will not be put out.

What's more, this is a matter of historical fact. In the years when London did not have a State fire service but rather a series of privately provided ones, they did not always put out fires in those properties owned by people who did not have insurance with them.

We can believe that the market is better at providing services and defend it when that means that people who do not pay do not receive. We do not need to insist, though, that it is perfect and will never lead to results that leave some people worse off.

On Letting Houses Burn

Gene at Harry's Place blogs about the fire department of Obion County. They were ordered to allow Mr Cranick's house to burn down because he had not paid the annual fee for fire cover. Gene asks:

But aren’t there other principles involved here– like basic human decency? Like caring for one’s neighbor?

He also goes on to cite some American person claiming that the decision was right according to the Judeo-Christian tradition. Clearly not happy he says:

Fischer can speak for himself about about his interpretation of Christian tradition, but there’s nothing Judeo about having the means to help a neighbor in distress and not using them. Quite the opposite.

First to answer Gene's question - yes it would be good to be caring and generously put out Mr Cranick's house fire. However, if the fire department made it clear that it would always put out fires even for those who did not pay then very soon no one would pay and then no fires would be put out. So while the people involved I'm sure wanted to help Mr Cranick they did make the right decision.

Moving on to the second point. Given that the reason for not helping in this instance was to prevent abuse in the future it turns out that the decision was in fact in keeping with Jewish tradition. The tradition involved relates to the paying of ransoms. As I understand it the Jewish religion places much importance in paying ransoms to release people from captivity. Nevertheless, this is not to be done when it will simply encourage more kidnappings. Thus the notion of not helping one person so as not to encourage further problems is in keeping with the Jewish tradition.

Forgetting History

Dizzy has picked up on a post over at Liberal Conspiracy. The posts concern Obion County where residents pay an annual fee for fire-protection. One resident did not pay and when his house caught fire the fire fighters did not put it out.

Sunny Hundal says, sarcastically:

"this is what libertarian-land gets you" 

Dizzy points out the absurdity of Sunny's complaint, citing a comparison to asking Direct Line to replace your stolen car when you have no insurance with them.

But Sunny's rhetorical question backfires tremendously. It was not the UK Government that started proper fire brigades at all. It was insurance companies who would provide the cover to their customers but not to anyone else. So yes, Sunny, libertarian-land gets you fire brigades!