United Liberty
The Free Market didn’t let the house burn
Wed, 10/06/2010 - 11:16am | posted by Tom Knighton
Some basic libertarian principles are catching flak over a house burning down. It seems that in Obion County, Tennessee, you’re required to either pay a $75 subscription fee for fire service or else risk your house burning down. Homeowner Gene Cranick didn’t, and when his house caught fire, firefighters watched it burn.
Some on the left are using this as evidence that libertarianism fails and is morally bankrupt. They also don’t know what they’re talking about.
First, many libertarians have no problem with municipal fire services. They don’t. Only a small handful want that in the private sector’s hands completely with subscriptions and such. However, what happened in Obion County wasn’t even what these people envision.
You see, Obion County does let residents opt in to paying for fire service. That is all fine and good. However, they also have a monopoly on fire services. I can subscribe to their service, or get nothing. That’s not the free market at work, that’s a tax they’re calling a fee but making optional. Gene Cranick should have had the choice of several operations if you’re going to make it optional. If the answer is still no, then oh well.
Cranick has stated that he would have paid anything once the fire broke out, and a free market operation would have responded to such. You see, the $75 subscription fee, in a free market, would have been part of a list of fees. Putting out a fire without the subscription fee would have cost more, but a free market operation would have been willing to do it for the extra income. Greed ain’t always a bad thing after all. Greed, the progressive boogie-man, would have put out the fire at Gene Cranick’s house. Adhering to regulations - you know, like all the regulations progressives seem to love? - caused Cranick’s house to burn down.
Free market fire departments open up all kinds of other problems, and I’m not going to deny it. We’ve tried them before and they didn’t work out so well. That’s the reason municipal fire departments started in the first place. However, if you’re going to blame the free market for something like this, you should at least make sure you know what you’re talking about.
Mr. Knighton, what is the basis of your opinion? You are citing “Libertarian Principles” that are under attack, where are you seeing this?
Here’s a couple of examples:
http://susiemadrak.com/?p=7710
http://cdevers.posterous.com/obion-county-tennessee-sounds-like-a-real-t…
Shannon, read the first paragraph of the blog article referenced below. Also, there were a number of comments that I saw on several stories chalking this up to Libertarian doings. Clearly the communists are afraid of losing power.
http://thelede.blogs.nytimes.com/2010/10/06/tennessee-firefighters-watch…
I first heard this story through an AJC blog post:
http://blogs.ajc.com/jay-bookman-blog/2010/10/05/the-ethics-of-letting-s…
The language in that column seems to me like the author is suggesting that the type of people who are against ObamaCare are the type of people who would let this guy’s house burn down. It’s for reasons like this column that UL’s libertarian defense post is necessary.
The market only dictates that Cranick has several options if it is feasible for those options to be available. If the alleged options would not make a profit, they wouldn’t exist. There doesn’t appear to be anything stopping a private company from starting fire service, other than the almost clear certainty that it wouldn’t make any money.
Mr. Knighton doesn’t appear to have a clue about what he’s saying here.
Someone else did the research on this here: http://www.gonzotimes.com/2010/10/fire-departments-and-free-markets/
To quote the applicable part:
So yes, there actually is something preventing a private company from starting a fire service without approval of the local body, which typically doesn’t allow outside competition with their own services.
But there is no county fire department, and my understanding is that most of the county leaders have an R by their name. Also, getting a state or county license does not stop many businesses, even hair salons usually need to have a specific license.
But there is a difference between getting a license, which is usually just filling out a form and paying a fee, and getting permission from a local government to compete with them.
There is no local competition. The South Fulton fire department’s jurisdiction stops at their city limits. This fire was in an unincorporated area of Obion County where there is NO fire department. The residents of Obion County have the choice to contract privately for the city fire departments to respond outside of their jurisdiction or alternately to have no fire protection at all. The county residents have voted repeatedly - for more than 2 decades - not to raise their taxes to support a county fire department.
There are several examples of subscription fire departments elsewhere in Tennessee - both private/for profit (Rural/Metro in Knox County) and several of the volunteer/non-profits in Hamilton County.
The reason for no private fire department in Obion County is simple - they’d go bankrupt as there isn’t enough customer base to keep a hypothetical private fire department solvent.
Tom, that quote seems to leave off an important bit at the end:
http://ctas-notes.ips.utk.edu/__8625727B0071AD79.nsf/0/EAEE7823B53A5CA08…
“Unless a fire department has a certificate of recognition from the State Fire Marshall’s office, it cannot solicit or receive money from any governmental source. Therefore, a county legislative body cannot appropriate funds to any fire department – county, city or volunteer – unless the department has a valid and current certificate of recognition. ”
So the certificate is only required for the fire department to receive public funds. From my reading of it, it sounds like a fully PRIVATE fire department could still exist. In fact, there’s a bit in the municipal handbook regarding this:
http://www.tmaa.us/pdfs/mun_hb07.pdf
“Volunteer Fire Departments
An 1831 law authorizing “private fire companies” to be formed by “any number of persons resident within a municipality” can be used to create a volunteer fire department (T.C.A. § 7-38-101–104). “
Jay,
I see what you’re saying, but the pertinent part in my mind is this:
That indicates to me that, when taken with what you quote, that all fire departments permitted to operate also are eligible for public money. This could be yet another roadblock on private fire companies to operate.
However, as I said, that’s not necessarily a desirable outcome either.
This isn’t some libelous misconstruing of libertarian principles. While this isn’t exactly free market economics at work, it does demonstrate why we need basic government services. If we let the free market take care of things like schools, or roads, or fire service, the simple fact is some people will be left out in the cold, or in the case of fire service, inside in the flame. The free market does not ensure multiple sources for goods or services. In rural locations, there often isn’t demand enough to support multiple businesses offering the same service, if there’s even enough demand to support a business at all. Try getting DSL or cable service in a rural location. Now, think what would happen if we let municipal services like water, fire, or schools operate in this fashion. This person’s house would still have burnt to the ground, but this time, it would have been because there was no one at all to pay for services, because there wasn’t enough demand.
You, sir, live in a fantasy world, populated by benevolent corporations who ensure everyone has necessary services, even when it isn’t profitable for them. That’s part of the point of government run services like this, to provide necessary services to people who would otherwise have to go without.
Thank you Bob for your lack of reading comprehension where I said that free market fire departments weren’t working when they were tried. ;) To quote specifically:
What fantasy land am I living in again? After all, you said nothing that disagreed with the practicality of free market fire departments.
Oh, ok, you weren’t arguing that it wasn’t the failure of the free market because “that’s not the free market at work,” but instead that history had already demonstrated the failure of the libertarian approach in this particular regard. Gotcha.
My argument was that it wasn’t the free market at work in that instance because of a variety of factors. However, I also said that a free market solution wasn’t necessarily practical either.
In short, I was saying both.
Yeah, sorry, I got a little confused by your whole paragraph that explains how allowing free market dynamics to enter in to the issue would have solved the problem. I guess my “reading comprehension” skills aren’t any better than the other Bob’s.
Let me see if I understand your argument:
The county has a “monopoly” on fire services. It’s a monopoly because the free market has not, in fact, stepped up to offer *any* competing services because they’re not practical or profitable, much less has it offered a variety of choices. (Also it’s a monopoly because the county *could,* in theory, enforce their “monopoly,” since potential fire services have to have their approval. Or the county could be completely fine with private services and all-too-happy to allow them, as they would provide fire service to currently underserved areas. No one knows because apparently no one has had any interest in offering such services.)
If the fire service *had* been a free market operation (in which case it wouldn’t have existed in the first place), they would have dealt with the problem by extorting money from a desperate man who was in the process of losing everything. No, wait, my mistake: The man with the burning house would have had choices in a free market, so once his house was on fire, he would have called a number of fire services, gone with the lowest bid and they would have saved what was left of his house, if anything. That is, if several such businesses existed in this area, which they don’t, because the free market has not, in fact, provided any.
In sum, blaming the free market for “something like this” shows ignorance, because history has already shown that the free market does not actually work in this situation.
Um, yeah, so I guess I’m still confused. I do have to say, the other Bob was really off base by saying you live in a fantasy land. Only the bit about how the free market would solve the problem existed in a fantasy world, since you clearly stated that the free market doesn’t work for such situations in the real world, and therefore the libertarian solution must only exist in an imaginary world. Yeah, I don’t see how this situation might cause people to criticize libertarian positions. Your argument, on the other hand, seems to reinforce the criticism of libertarianism: that the libertarian solution to a particular problem exists only in an imaginary fantasy land.
Also, perhaps I’m just dumb, but it looks to me like the other Bob’s entire response is, in fact, pointing out the complete impracticality of free market fire departments. Er, and didn’t you just reiterate that free market fire departments were historically shown to be impractical? I’m really confused. Well, one of us is, anyways. Perhaps I’m confusing impractical with impossible?
Ultimately that brings me to the title of the post: “The Free Market didn’t let the house burn.” Isn’t that precisely what the free market did? After all, the market didn’t save this guy’s house, and there was nothing preventing it from being involved. The market had no interest in entering into this situation, and by its complete absence did exactly that.
Bob,
There are a lot of avenues a free market fire department might take, and I personally feel this is one area where none of them would be ideal in any way, shape, or form. (That’s free market fire departments, not private which I’ll get to in a moment) However, in this instance it wasn’t a free market, but a regulation that was to blame for this man’s house burning down. Would a free market FD have handled it better? Well, they may have charged him out the wazoo to put out the fire which could arguably be better, or they may have done the same thing. But that doesn’t change that this instance wasn’t the free market at work.
Fire service is one area, along with police, where I believe that government does have a place. Obion County blew it because instead of contracting with the fire department in question to provide fire service for the entire county or seeking another provider (private fire departments do work well as a contract service for a government, for example), they set up a situation where something like could happen.
I hope that clarifies my position better.
Its difficult to come to the right conclusion if one starts with the wrong premise.
This was classical government failure, not market failure. These firefighters were government bureaucrats for whom doing as little as possible, by the book, and ignoring both profits and morality, were the drivers. Private firefighters would have put out the fire in a jiffy for a tidy profit, given that most of their costs are fixed. A reasonable price, say $10k, would have been a great deal for Cranick too. A for-profit company would have a strong incentive to keep the cost reasonable, since reputation is critical for private companies not backed by government coercion.
I am amazed that no major media has accurately reflected the basic elements of this case - that these firefighters did not operate on a private, for-profit basis.
Thanks for this very reasonable blog post. I can’t believe how some folks have seized on this family’s misfortune as an opportunity to make a dig at libertarians. A misguided dig, as you explain.
“However, they also have a monopoly on fire services.”
Actually, that is not true. Mr. Knighton, or anyone is else, is free to start their very own fire department to service Obion Co. Tennessee.
But because there is no competition, it’s a monopoly. From dictionary.com:
Not necessarily a government enforced one, but it’s still a monopoly. Of course, regulations are in place to require a local government to approve of a new fire service as I mentioned above. The result of this has the effect of discouraging new services in the least, and can result in outright prevention very easily.
In this case the gentleman lived in an unincorporated area, didn’t pay for fire protection which is a MUNICIPAL service, and not a county service, because that district did not want or attempt to setup a county-wide system. Probably from fear of a tax riot like Tennessee had in 2001 when they tried to implement a small income tax.
This gentleman had the right to pay for service from a near by municipality that offered it to non-residents for a fee. He chose not to, he was issued a letter and a phone call and knew he would not have fire protection, he chose to not have it. Now his house burns down and he is getting sympathy everywhere, and it is exposing a huge flaw here:
If you do not pay your taxes, you can not expect government services. If you do not pay for something, you have no right to expect to make use of it. Period.
Imagine if we only had to pay our Car Insurance premiums when we got into a wreck, or if we could get robbed then buy insurance for everything that was stolen from us. My store gets broken into then I get a security staff or a firearm. Or I could have had foresight on what in this case is a very basic need and a service available and make sure I had that protection.
If you want the services of a government you have to pay for them, just like everyone else. I applaud the Fire Department Chief and the Mayor of that town for sticking to their guns and not permitting a free ride on their taxed system.
I am glad you are not my neighbor, and that you are keeping tabs on all the moochers out there.
Gene Cranick says he paid the fee in previous years, but that he forgot. I guess maybe he was busy this year.
If you are late paying your taxes, the government does not watch your house burn down. I image that even if you were late on the 4th payment on your car insurance, they would still cover you. If you’re late paying your loan shark, then yes, they would watch your house burn down (admittedly after setting it on fire). What the fire fighters, the city officials, and the county officials did is not much better: they set up a system that was designed to produce this result and they specifically prevented any other outcome from officially occurring so that a burned out house ever year or two would “remind” everyone to pay up. I say “officially” because exceptions to this policy were made before.
The policy is stupid (the county is worse off), heartless (a family’s belongings are lost for good), and cruel (pets died). Why wasn’t an exception made? What if a person were in the house? What if 5 acres of woods were on fire? What if an arsonist started the fire? What if the fire had been started to cover up a crime?
Again, if mandatory TAXES were used to pay the fire department and Gene Cranick were 3 months late paying them, he would still have a house.
Mr. Cranick was fast-and-loose with what actually happened when he appeared on MSNBC. What actually happened was that the City of South Fulton notified him by mail (3 times) and by phone call (once) that his subscription had expired and asked him to renew. He refused. He had the money - obviously - as he told the fire department at the time of the fire. He offered them “any amount” to extinguish the fire. There has been some discussion wondering if he was actually offering a bribe to a public official by offering money for the fire department to provide a service for which he had not paid and his neighbor had already paid.
The free market did not burn down this house….
but the idea that taxes are bad and a fee is better did.
And I wonder what happens to the value of the house next door when this happens?
So then when firefighters go in a burning house and get burned up since they chose to go n y do they expect handouts. Guess they shouldve got a job that had better insurance. Im sorry if they let animals burn up imagine if a human was in the house. Sounds like bs and they should rethink there laws about fire departments. We pay state city county federal taxes there shouldnt be any fee for fire protection since those tards wont allow for private protection. And this is supposed to be a civilized country. Go troops fight for this dont be shocked when the respect thats deserved is given to these worthless civil workers.
It seems pretty simple to me. You point out that free market fire departments haven’t worked in the past. The sad case of Gene Cranick’s home shows the consequences of a regulated opt in system. In contrast, we have a long history of a single-payer fire department working well. That doesn’t mean we should go with single-payer approaches on everything — far from it. It just means in the case of fire departments, the single-payer system has worked better than anything else we’ve tried. It certainly hasn’t been perfect, but it’s been better than the free market or regulated opt in approaches.
The link to Libertarian values is the idea that any fire department could fail to respond to a fire, not the details of who paid what tax or fee to whom. In the Libertarian world it’s ok to let your neighbor’s house burn to the ground.
Libertarians have the unique privilege of arguing for a system that no one has had to actually suffer under.
“That no one has to suffer under” Unless they happen to be born into a society to a family with no wealth as it has been tied up generations ago with a select portion of society.
Thank you for taking a long term view of the your philosophy. If of course you think I am full of crap please go inspect the historical records of relative wealth in your country.
That’s not accurate. The South Fulton Fire Department has NO duty to respond outside of their city limits unless the individual property owner has a fire protection contract. Don’t be confused into thinking that this was a local fire department that had a duty to act and didn’t follow through. The location where the fire occurred has NO fire department at all. It’s an unincorporated county area, and it is not within the City of South Fulton.
Whatever your views on libertarianism or the free market, there’s simply something un-American about standing by with a hose and watching while somebody’s house burns down when you could perfectly well prevent it. How about we don’t let basic values get lost in all our political posturing?
Are you aware that the South Fulton FD had previously tried to do after-the-fact billing in order to avoid houses burning down? Are you demanding that the City of South Fulton give away free fire protection in the unincorporated areas of Obion County where the fire occurred?
Are you aware that South Fulton has less than 2,000 residents and that the practical effect of what you insist upon would have that small group providing free fire protection to a county with around 35,000 residents?
Demanding that a small minority provide free services to a majority that refuses to fund their own services is now somehow un-American??? That was a rhetorical question - of course it’s not un-American to have local jurisdictions to provide their own services.
S. Fulton has the one option of fixing the entire mess. They are NOT REQUIRED to provide services outside the city on a subscriber basis, they can simply cease providing it and the county will continue with what it has now. NO FIRE PROTECTION. Then these “victims” will no longer have to worry about coughing up the $75 annual “extortion.
You are a troll.
Good God, this man’s home burned down, while the fire dept sat idle, watching…..what kind of people have we turned into? 3 dogs one cat burned to death…..if a human was inside, I’d imagine the same outcome! What have we become? Firemen watching…and not lifting a hand…………..and ya’ll are arguing semantics? Would NOT want to have any of you as my neighbors……….people need to help each other….this is about as disgusting as what obama and thugs have done to this country! We definately have sunk into being a third world country How can these firemen, the chief and the mayor sleep at nite?
Interesting blog.
Interesting post.
Interesting discussion.
I’m intrigued by these comments.
“Many libertarians have no problem with municipal fire services.”
“Free market fire departments open up all kinds of other problems, and I’m not going to deny it. We’ve tried them before and they didn’t work out so well. That’s the reason municipal fire departments started in the first place.”
I would be curious how libertarians differentiate those municipal services that they support and those they do not support.
I would argue that free markets for health care open up all kinds of other problems. I’m not going to deny it. We’ve tried them before and they didn’t work out so well. That’s the reason government got involved with Medicare, with Medicaid, with the Indian Health
Service, with the VA. In fact, when you include government employee benefits, government pays for about 70% of health care expenditures.
I would agree with you, the free market didn’t let that house burn. It was just plain meanness.
And I would argue that is just plain meanness that underlays the objections to health care reform.
After all, as a society we have already agreed to provide health care for the old, the poor, for Indians, for veterans, and for government employees. The people we are trying to reach are the margianlly employed, those working in low wage jobs, working multiple part time jobs, or who can’t work because they are sick and who can’t get better because they don’t have health insurance.
Seems to me that is a position that libertarians could find a way to support.
http://thehealthcaremaze.us
There is a lot of misinformation circulating regarding this incident. The South Fulton Fire Department covers a city of approximately 2,500 people. Their annual operating budget is $8,000. Their fire department has been struggling to survive for at least 20 years, per comments made by the fire chief in neighboring Union City, TN.
Obion County has over 30,000 residents. Their county residents have repeatedly voted against anything resembling a tax increase for fire protection, whether it be a county fire department or additional subsidies for South Fulton and the other cities who respond to county fires.
That leaves South Fulton with essentially two choices: Contract with individual property owners and charge the subscription fee, or have their county suburbs receive no fire protection at all.
It is completely unrealistic to expect South Fulton’s small population to subsidize fire protection in the county. Even if they wished, they simply can’t afford it.
The archived fire protection ordinance linked above is obsolete. South Fulton no longer charges a $25 subscription fee and a $500 firefighting fee - they simply charge a $75 subscription fee and nothing else.
I’m not a fan of that system, but given that the county taxpayers have refused to fund a better system, it’s better than any affordable alternative, regardless of other market forces.
Fire departments in existence before July 1, 2003 were required to file an application and receive approval by the State Fire Marshall’s office in order to continue to operate. Upon being recognized as a fire department, the State Fire Marshall issues a certificate of recognition to the department that is valid for a period of three years. Once recognized, the fire department is classified as career, volunteer or combination.
http://www.pandora-uk.org/
I’m not American, but I find the American Right deeply disturbing. I heard about this issue through a report of Glenn Beck mocking the family.
So I wanted to thank you for staying civil throughout this post and the comments. I don’t consider myself a libertarian, but I probably agree more than disagree with libertarian ideas, and I appreciate an informative, cool-headed and respectful explanation.
I actually found this post because it’s quoted in Wikipedia - the quote there didn’t make sense to me, so I came here, and ended up editing the Wikipedia entry to (I hope) better explain your argument.
Also from that section, paraphrased: An editor at the Alternet website noted that the county commission that had voted the plan (for a tax-funded countywide fire department) down was dominated by Republicans, and he ascribed the county’s decision to “30 years of right-wing demagoguery about the evils of ‘collectivism’ and the perfidy of ‘big government’”.
This is where I find the American Right deeply disturbing, because I hear a lot of rhetoric against “socialism” and “big government” rather than an analysis of the specific issues. Unfortunately, blogs like this don’t attract followers anywhere near as well as an inflammatory talk show. (In terms of shows that attract lots followers and offer a different point of view, “The Daily Show” is far more informative and factual, but it’s sad if the best antidote we have is a comedy show.)