Salon’s Misguided Attack on Libertarianism
Wow, this guy Alex Pareene really despises libertarians. Pareene jumped on the case of the fire department letting the house burn down, as an example of Hayekian thought–he even plastered a picture of dear Friedrich at the top of his post.
David R. Henderson does a good job over at EconLog pointing out the absurdity of this ploy. This was a government-run fire department. Furthermore, the behavior of the firefighters doesn’t make sense even from a narrow business perspective.
So how in the heck is this an example of “privatization” or “the free market”? If you wanted to make a comparison to health insurance, the moral would be: Sarah Palin was right, don’t let them get life and death power over you. Look at how heartless these bureaucrats can be.
However, I want to point out some things in Pareene’s article that I haven’t seen mentioned yet:
* In the article that Pareene quotes, the following sentence is its own paragraph: “The mayor said if homeowners don’t pay, they’re out of luck.” Now shouldn’t that have set off an alarm somewhere, that this wasn’t a private operation? When there are news articles on, say, the “outrageous” practice of airlines charging fees for checked baggage, do the reporters go quote the mayor of Atlanta for his reaction? And then he says, “Hey, if fliers don’t pay to have their luggage checked, they’re out of luck. Hope they have extra undies tucked in their pocket.” ?
* After setting up the story, Pareene needs to find a libertarian defending the fire department, right? I mean, that would be crucial in his case. Unfortunately, he can’t find one. So here’s the next best thing:
Daniel Foster, The Corner’s resident hip libertarian-leaning conservative, is rightly appalled by this entire story. He has no problem with opt-in government, of course! It’s just that he has this crazy notion that the firefighters had a moral responsibility to stop a man’s house from burning down, especially after they responded to his neighbor. And, come on, the guy offered to pay! So no moral hazard!
OK, everyone keeping up? In order to prove how stupid libertarians are for supporting this ridiculous program implemented by a city government, Pareene quotes National Review’s “resident hip libertarian-leaning conservative.” So not even an actual libertarian, mind you, just a libertarian-leaning conservative. And…this libertarian-leaning conservative is APPALLED by the story.
* Hmm, this is quite a corner into which Pareene has painted himself. How is he going to turn a libertarian-leaning conservative, who is appalled by a city government’s policy, into a libertarian praising the free market?
Simple: Pareene will quote someone who comments on the blog:
A-ha, a reader responds. He “offered.” But he is clearly a deadbeat, and a leech on society, and the firefighters were right to watch as everything he owned became ash.
UPDATE: A reader writes:
Yes, he offered to pay, while his house burned. I can’t prove what would have happened, but the FD would probably have had to sue him to gain full reimbursement. Maybe they need to start carrying pre-printed contracts for the homeowners to sign quickly and obligate themselves for the full cost plus a little profit.
A man whose house is on fire will say anything to a guy with the means to put the fire out — best not to trust him, unless you can get it in writing.
I sometimes feel bad for smart, principled conservative bloggers, because the only people worse than their peers are their readers.
(I realize the above is a little confusing; it’s Pareene quoting Foster, quoting a commenter on Foster’s post [I think!].)
So there you have it: In order to blow up the extreme radical case for privatization, Pareene puts a picture of the moderate Hayek at the top of his post (who, as far as I know, didn’t call for privatizing the fire department). Then he quotes from a story that clearly says it was the city of South Fulton in charge of this, and even quotes the mayor defending the fire department.
Then, Pareene quotes a conservative writer who was appalled by the whole thing.
Finally, Pareene quotes from an unnamed person who left a comment on the National Review blog, which Foster then incorporated into his post. Pareene doesn’t establish that this commenter is a libertarian, and in fact, I’m not even sure what side the guy is on; he was so sarcastic it’s hard to tell whom he’s mocking, the defenders of the fire department or of the homeowner.
Truly, this is the last nail in the coffin for libertarianism.
I think a better phrase is “Libertarianism has thus been relegated to the ash heap of history”.
These are our opponents. They are ALWAYS like this. They are either liars, noodle-brains or both.
Speaking of Krugman, a Peter Schiff challenge to Krugman made it into the Krugman blog comments:
http://www.economicpolicyjournal.com/2010/10/schiff-challenge-to-paul-krugman.html
BTW, have any of you people actually found a debating opponent who would even admit that there is a substantive difference between crony capitalism and laissez faire? These are our opponents.
A man whose house is on fire will say anything to a guy with the means to put the fire out — best not to trust him, unless you can get it in writing.
Bah, this subjunctive leeching is exactly why we need timeless decision theory! Act so as to maximize the expect utility, weighting each action’s outcome by the probability that that outcome would happen if this algorithm output that action.
Anyway, I think that quote gets to the root of why they didn’t put out the fire. Even if the guy were serious, he would probably have a duress defense to fall back on, so the firemen had no reason to believe his promise. In a contract-enforcing society with a sufficiently refined decision theory, they would have enforced such a contract for this very reason — and probably given the fire department a lien against the property (ahead of the mortgager) if he refused to pay.
Thanks Dr. Murphy- excellent analisys. I’ve linked to your post here: http://www.gather.com/viewArticle.action?articleId=281474978577549
Not really. This was a city fire department, but it was still behaving as if it were a private company. The key point is that they were offering insurance services for voluntary pay. If the insurance payment wasn’t made, the service would not be provided. This is no different from any type of private insurance.
Bob,
Great post. I was curious how the insurance companies acted, since they would have to take a big hit because of the fire fighters’s actions. We are always told that private businesses are out for profits only (Of course they are, but usually they mean this in a bad way). Well, they could lower the claim because he didn’t pay for the fire service, but they have never done that in one of these circumstances. Of course they haven’t, because it would ruin their reputations and cost them business. What anti-free market folks miss is that only looking for profits leads to them caring about their reputation and building good will.
Here’s an article on the insurance.
http://www.insurancejournal.com/news/southeast/2010/10/05/113824.htm
Any business that was already there… would clearly just sign him up then and there for the firefighter service and/or charge him a whole lot more than the annual $75. Maybe $200 or $500. Still would have been a steal on the part of that
It seems as if an on-the-spot sign-up would be for more than $500, if the base fee was $75. It seems as if what you want is an on-the-spot fee that equals or exceeds the base fee when the on-the-spot-fee is discounted per the likelihood that one would need fire service. If there’s only a 2% chance of needing service, then people will presumably avoid paying the subscription fee unless the on-the-spot fee is $3,750 or higher.