Libertarian Experiment Goes Up In Flames

 

Last week, firefighters in rural Tennessee stood by and let a man’s house burn to the ground because the homeowner had neglected to pay the $75 fee for opt-in fire emergency service.

Homeowner Gene Cranick and his family lost all their possessions as well as their three pets in the blaze. Though firefighters were at the scene to battle the fire on neighboring property, they refused to put out the fire on the Cranicks’ property. The mayor of the South Fulton (which is the closest city to the Cranick’s rural home) cited moral hazard as the reason why firefighters could not help the man once the fire had already begun:

“Anybody that’s not inside the city limits of South Fulton, it’s a service we offer. Either they accept it or they don’t,” said South Fulton Mayor David Crocker….[He] said that the fire department can’t let homeowners pay the fee on the spot, because the only people who would pay would be those whose homes are on fire.

Daniel Foster has a great discussion about the story over at The Corner. “This is bad for the libertarians,” Foster says.

I have no problem with this kind of opt-in government in principle — especially in rural areas where individual need for government services and available infrastructure vary so widely. But forget the politics: what moral theory allows these firefighters (admittedly acting under orders) to watch this house burn to the ground when 1) they have already responded to the scene; 2) they have the means to stop it ready at hand; 3) they have a reasonable expectation to be compensated for their trouble?

…I’m a conservative with fairly libertarian leanings, but this is a kind of government for which I would not sign up.

The pressing questions: What should the firefighters have done in this scenario? Is this story evidence of the inherent failures of libertarianism? And lastly, for which type of services is opt-in government appropriate?

(h/t Kenneth and Trace)

There are 188 comments.

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  1. Inactive

    Didn’t Kevin WIlliamson smack Foster down?

    Yes, he did.

    • #1
    • October 7, 2010 at 9:58 am
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  2. Inactive

    Couldn’t they have just put it out and billed the guy after? I see no reason why the bill would have to be only $75. Make him pay whatever makes sense based on costs & incentives, $500, $1500, $3000, etc.

    • #2
    • October 7, 2010 at 10:01 am
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  3. Member

    The simple “you didn’t pay, so we can’t save your house” strikes me as a bureacratic response.

    I think an enterpreneurially-minded firefighter would have said “we’ll save your house, but it will cost you”. It would have resulted in more revenue for the firefighters, a reasonably happy ending for the homeowner, and still have created no “moral hazard”.

    • #3
    • October 7, 2010 at 10:02 am
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  4. Inactive

    Maybe a better way is, $75 in advance, or $7500 at the door–the door that’s on fire.

    • #4
    • October 7, 2010 at 10:02 am
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  5. Podcaster

    First, how does any unincorporated area in America not have a volunteer fire department?

    Second, I wholeheartedly endorse Palaeolus’ proposal. Put the fire out and then present a bill for actual services. The water bill alone would probably run in the hundreds.

    • #5
    • October 7, 2010 at 10:05 am
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  6. Member

    Couldn’t this be handled in the same way that showing up at the emergency room now is?

    • If you request emergency fire fighting, and we can get there, we will rescue lives and fight the fire to the best of our ability
    • You will be charged the full cost of this service. It will likely be tens of thousands of dollars.
    • You can prepay for the service, before you need it, for a small fee of 75 dollars per period. If you have, that covers the total cost if and when you do need it.
    • If you are truly indigent and cannot pay, you don’t. Some free-riding is possible to absorb.

    I think that we confuse people when we hide the true cost of good things like fire fighting in something as non-specific as taxes, especially when those taxes are not paid directly by a functioning majority.

    It’s not that the free market can’t do these things, it’s that we have numbed peoples senses to the true cost of things. The demand for free things is infinite.

    • #6
    • October 7, 2010 at 10:06 am
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  7. Member

    At a simple moral level this is a truly awful story and professionally the firefighters should feel ashamed. At a functional level however I would still not be ready to write-off opt-in fire protection. I think a fair market response would be that in these circumstances the service should be provided but at a much higher cost. The fee for on-the-spot coverage should be $5,000 or something equivalent that makes the point and also compensates the fireman for their time, effort, skills and materials.

    If we’re being really honest, the rational case is that we need to move far more in the direction of Libertarian principles, not embracing them to the point of idiotic outcomes. So the firefighter case is a no-brainer. The far more challenging one is TARP: At what point do you save the corrupted bank that has the potential to undo us all? Or allow them to fail even if it means doing real potential damage to the economy.

    • #7
    • October 7, 2010 at 10:07 am
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  8. Inactive

    I don’t see this as Libertarianism in action, or a slam on the principle. Libertarians believe in helping others, working hard, and making a reasonable profit. If possible the men should have put out the fire and charged him several thousand dollars, enough to pay everyone for the labor, equipment, and a penalty for not being a member; enough to discourage people from not joining.

    We should be treating this as if it were just any other insurance policy. You can’t expect to sign up for it after the fact.

    When I first heard this story it was reported that the firefighters refused because the house was too far gone. We’re probably not getting the whole story.

    • #8
    • October 7, 2010 at 10:08 am
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  9. Inactive

    It will be interesting to see what happens when Cranick files a claim with his homeowners insurance carrier. Can that company deny Cranick’s claim for failure to pay the fee?

    What about the company that holds his mortgage? Can they sue the fire department for allowing their property to burn?

    • #9
    • October 7, 2010 at 10:10 am
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  10. Contributor
    Diane Ellis Post author

    I’m with you Palaeologus, Calvin, and Etoile. It’s like health insurance. Pay your monthly premiums while you’re healthy so that when you get run over by a bus, the insurance will cover the $300,000 hospital bills. Don’t pay your monthly premiums, and you’re stuck paying the $300,000.

    • #10
    • October 7, 2010 at 10:10 am
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  11. Contributor

    Where exactly did this system “go wrong?” Looks to me like it worked perfectly.

    Buying insurance is a bet just as much as not buying insurance is a bet. Don’t force me to bet (Obamacare).

    Some bets you win, some bets you lose. The homeowner here made a bet and lost.

    • #11
    • October 7, 2010 at 10:11 am
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  12. Member

    Here’s a suggestion for the mayor of South Fulton. Authorize someone to go to non-covered homes to sell them a firefighting policy, and pay that person a commission. I suspect a simple pitch like “$75 a year will save you more than that on your fire insurance, and may save your home, too” will be very persuasive.

    • #12
    • October 7, 2010 at 10:11 am
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  13. Member

    What moral obligation exists here? My inclination is to compare this situation to one in which your neighbors’ house is burning down. If we assume no danger of the fire spreading to your own home, do you have any obligation to help your neighbor? Even if you have no obligation, should you help anyway. It seems wrong simply to refuse to help your neighbor unless there are some mitigating circumstances (you have to take your wife to the ER or your neighbor consistently sets fire to his house for kicks and you would be encouraging this behavior). The firefighters may not have had a legal obligation to assist, but, baring circumstances such as an epidemic of free riders taking advantage of the fire department, I see no reason not to help out as fellow citizens. I agree with Mark on this point. Barring a huge problem with free riders in a particular area, the firefighters should have helped out.

    • #13
    • October 7, 2010 at 10:17 am
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  14. Member
    Tommy De Seno: Where exactly did this system “go wrong?” Looks to me like it worked perfectly.

    Buying insurance is a bet just as much as not buying insurance is a bet. Don’t force me to bet (Obamacare).

    Some bets you win, some bets you lose. The homeowner here made a bet and lost. · Oct 7 at 10:11am

    So Tommy, what if lives had been at risk? What if it was the middle of the night and his five year-old granddaughter were trapped in an upstairs bedroom? Same tough, purist stance?

    • #14
    • October 7, 2010 at 10:22 am
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  15. Inactive

    It is nice to hear those who face the dangers of a keyboard each day question the action of firefighters who face no such peril. The homeowner offered to pay the cost of fighting the fire. Apparently city policy prevented the firefighters from doing so since the city official indicated they had followed the policy. I think a wiser and better constructed policy could easily be drafted, but I am hesitant to criticize the decision of people who risk their lives and actually had first hand knowledge of the situation.

    • #15
    • October 7, 2010 at 10:23 am
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  16. Member
    liberal jim: It is nice to hear those who face the dangers of a keyboard each day question the action of firefighters who face no such peril. The homeowner offered to pay the cost of fighting the fire. Apparently city policy prevented the firefighters from doing so since the city official indicated they had followed the policy. I think a wiser and better constructed policy could easily be drafted, but I am hesitant to criticize the decision of people who risk their lives and actually had first hand knowledge of the situation. · Oct 7 at 10:23am

    Sure, sure… we all love firefighters. But the real point of the story is not what they did or didn’t do when they got there — maybe it was too far gone — but that they were not dispatched at all in response to the call.

    • #16
    • October 7, 2010 at 10:29 am
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  17. Moderator
    Diane Ellis, Ed.: I’m with you Palaeologus, Calvin, and Etoile. It’s like health insurance. Pay your monthly premiums while you’re healthy so that when you get run over by a bus, the insurance will cover the $300,000 hospital bills. Don’t pay your monthly premiums, and you’re stuck paying the $300,000.
    Calvin Dodge: The simple “you didn’t pay, so we can’t save your house” strikes me as a bureacratic response.

    Yep.

    Hard for me to see the “failure of libertarianism” here when canny libertarian firefighters could have used their freedom to contract to make a tidy sum for their department by providing service to a desperate man. Unless, as River says, the real problem was that the house was too far gone in the first place to be saved.

    Also, when the homeowner said, “I thought they’d come out and put it out, even if you hadn’t paid your $75,” he lost a bit of my sympathy. It’s one thing to offer a deal in your desperation, knowing you may not be successful. It’s another to presume upon others, as it looks like this man tried to do.

    • #17
    • October 7, 2010 at 10:29 am
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  18. Member

    Liberal Jim, was there a question of safety here? A question of safety would justify not helping even if the homeowner had actually paid the fee. The basic principle at play is legal, contractual obligations versus moral obligations, no?

    • #18
    • October 7, 2010 at 10:30 am
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  19. Contributor
    Trace Urdan
    Tommy De Seno: Where exactly did this system “go wrong?” Looks to me like it worked perfectly.

    Buying insurance is a bet just as much as not buying insurance is a bet. Don’t force me to bet (Obamacare).

    Some bets you win, some bets you lose. The homeowner here made a bet and lost. · Oct 7 at 10:11am

    So Tommy, what if lives had been at risk? What if it was the middle of the night and his five year-old granddaughter were trapped in an upstairs bedroom? Same tough, purist stance? · Oct 7 at 10:22am

    You change the facts in one sympathetic direction, let me go another way: Suppose his car is broken down – the mechanic down the street is morally obligated to fix it? If his plumbing breaks, is the plumber obligated to fix it?

    We’re both on slippery slopes here, where changing facts can change our response.

    But stick with these facts. Where this situation is on the slope is most like the insurance metaphor used by River above. This service was offered and turned down. The homeowner lost his bet.

    • #19
    • October 7, 2010 at 10:32 am
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  20. Inactive

    Where did the system go wrong?

    In the bureaucratic assumption that there are only 2 choices.

    1) Pay the $75.00 and be covered

    2) Don’t Pay the $75.00 and Not be covered.

    This is the problem with public bureaucracy, no creative thought.

    The lack of option 3 is where this system fails.

    3) Don’t Pay the $75.00 and be responsible for the full cost of a fire call by the department.

    In all 3 cases the Fire Department acts like a Fire Department.

    However adding choice number 3 would have made sense and shown that policy makers were thinking things through.

    Never forget that a real bureaucrat beleives that: Rules ARE a substitute for thinking!

    or

    In a bureaucracy we don’t make sense, we make regulations!

    .

    Trace: I guess you’d say that the current system includes a “Death Panel” under your scenerio of Lives Being at Risk.

    • #20
    • October 7, 2010 at 10:34 am
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  21. Contributor

    Jaydee the problem with your 3rd scenario of being allowed to pay a higher amount if your house catches fire is that fires are rare. Most people will take that bet and not pay the $75. Then the fire department is underfunded and can’t protect anyone.

    Don’t forget the 4th scenario – the homeowner gets his bill and says “I didn’t call you and ask you to put the fire out. I don’t owe you a dime. Sue me.”

    You think that won’t be the norm?

    • #21
    • October 7, 2010 at 10:39 am
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  22. Member

    A basic question regarding how to organize a society is the problem of free riders like this man. This is like the story of the grasshopper and the ant. It sounds hard, but the larger truth is that a society can tolerate some free riders, but eventually more ants decide it is easier to act like grasshoppers and the services become substantially worse or even stop altogether.

    In this case the system will not break down today or tomorrow because of providing free services for one person. There is a tipping point at which it will. On the other hand, this terrible example will encourage some grasshoppers to behave like ants which conversely makes for a more robust system than would occur otherwise.

    • #22
    • October 7, 2010 at 10:46 am
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  23. Contributor
    Ross Conatser: A basic question regarding how to organize a society is the problem of free riders like this man. This is like the story of the grasshopper and the ant. It sounds hard, but the larger truth is that a society can tolerate some free riders, but eventually more ants decide it is easier to act like grasshoppers and the services become substantially worse or even stop altogether.

    In this case the system will not break down today or tomorrow because of providing free services for one person. There is a tipping point at which it will. On the other hand, this terrible example will encourage some grasshoppers to behave like ants which conversely makes for a more robust system than would occur otherwise. · Oct 7 at 10:46am

    Perfect! Hat tip to you!

    • #23
    • October 7, 2010 at 10:50 am
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  24. Moderator
    Tommy De Seno: Jaydee the problem with your 3rd scenario of being allowed to pay a higher amount if your house catches fire is that fires are rare. Most people will take that bet and not pay the $75. Then the fire department is underfunded and can’t protect anyone.

    Good point. Collecting a small sum from people before the fact of rare events like fires has got to be much, much easier than collecting much larger sums from people after fires.

    It’s even possible that, in order for the fire department to stay funded enough to function, their “after the fact fee” would have to be so large that letting your house burn down would seem cheap by comparison. If, as Tommy points out, the fire department is able to reliably collect at all.

    I’m content to agree with Tommy here, that Mr Cranick made a bet on insurance and lost. Tragic, sure. But life is full of bigger tragedies than that.

    • #24
    • October 7, 2010 at 10:55 am
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  25. Inactive
    Tommy De Seno: Jaydee the problem with your 3rd scenario of being allowed to pay a higher amount if your house catches fire is that fires are rare. Most people will take that bet and not pay the $75. Then the fire department is underfunded and can’t protect anyone.

    · Oct 7 at 10:39am

    Why is it underfunded? Because not enough opt-in folks signed up?

    Anyway, the existence of “supplemental insurance” indicates (to me at least) that many people won’t take that bet.

    • #25
    • October 7, 2010 at 10:56 am
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  26. Inactive
    Tommy De Seno: Jaydee the problem with your 3rd scenario of being allowed to pay a higher amount if your house catches fire is that fires are rare. Most people will take that bet and not pay the $75. Then the fire department is underfunded and can’t protect anyone.

    Don’t forget the 4th scenario – the homeowner gets his bill and says “I didn’t call you and ask you to put the fire out. I don’t owe you a dime. Sue me.”

    You think that won’t be the norm? · Oct 7 at 10:39am

    Actually, the Fire Department is fully funded by the City of Fulton.

    The $75.00 fee was for response outside their jurisdiction, not for funding the department.

    What would the city department do if the unincorperated area were to put together a volunteer department and not need the city to respond?

    .

    As for Scenerio 4, all 911 calls are recorded and archived with the call origination included in the archive.

    .

    Again, this is a bureaucratic problem.

    • #26
    • October 7, 2010 at 10:57 am
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  27. Contributor

    Jaydee would the fire department have an obligation to go to towns where they don’t offer service for a fee?

    • #27
    • October 7, 2010 at 11:03 am
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  28. Thatcher
    Mark Woodworth: Couldn’t this be handled in the same way that showing up at the emergency room now is? …

    … It’s not that the free market can’t do these things, it’s that we have numbed peoples senses to the true cost of things. The demand for free things is infinite. · Oct 7 at 10:06am

    Years ago, this situation frequently occurred in emergency rooms, always good for a “Patient Dies in Parking Lot, No Insurance” headline. Public outrage lead to passage of EMTALA – the Emergency Medical Treatment and Active Labor Act – which requires hospital emergency rooms to treat any patient prior to any discussion of insurance or ability to pay. Hospitals typically hide 12 to 16% in your hospital bill (or insurance premium) to cover this cost. (Probably a lot more for you left-coastals with the illegal immigration problem) Similar laws for public transportation, the supermarket, day care, utilities, universities, and any other good or service deemed “essential” would surely lead to the worker’s paradise that our president envisions.

    • #28
    • October 7, 2010 at 11:07 am
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  29. Inactive

    The best summery of this issue is that there are several good ways this arrangement could have been setup (and has been handled in other states/counties) but it was handled poorly and everyone comes off badly.

    A lessons for local governments everywhere. Think through these scenarios beforehand, so you don’t put your firefighters into these impossible situations.

    • #29
    • October 7, 2010 at 11:11 am
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  30. Inactive
    Tommy De Seno: Jaydee would the fire department have an obligation to go to towns where they don’t offer service for a fee? · Oct 7 at 11:03am

    I don’t beleive they do.

    Their responsibility is to protect the area they were chartered to protect.

    When the department runs outside of it’s area to provide service they are leaving the area they were chartered to protect vulnerable. Here in Puyallup our fire department has an agreement with the Graham and Fredrickson departments to back fill for each other in a quid pro qou pro basis.

    The people in that unincorporated area were given an option;

    City of Fulton said, we will send our Fire Department to your home from our City if you pay us $75.00 a year. (pretty cheap, my Homeowner’s Association asks for more.)

    The City of Fulton Fire Department is Responsible to the City of Fulton for fire protection. If another town has a Fire Department of their own which proves inadequate to a situation, the City of Fulton may respond if an agreement was made ahead of time.

    But Fulton is under No Obligation to Respond in the absense of such.

    • #30
    • October 7, 2010 at 11:11 am
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