04 October 2010

Libertarian Fire Protection In (In)action

In parts of Tennessee, you get fire protection only if you pay a $75 a year fee in advance. Once your house is on fire, you can't buy it at any price as one Tennessee resident learned to his chagrin. The neighbor of the fellow whose house caught on fire did pay the fee and the fire department did come to stop the fire from spreading to him, although this was surely more costly because the fire department did not come to address the first fire.

I also imagine that the insurance company of the fellow whose house burned down will not be impressed to learn that his failure to pay a $75 a year fee to obtain fire service resulted in a large loss for them and may try to deny coverage as a result, or to the extent that an insurance payoff goes to a blameless mortgage holder rather than the owner, to sue the home owner for indemnification for its loss.


Maju said...

I really hate ultra-Capitalism being called Libertarianism, sincerely. For me, until I got Internet connection, Libertarian meant Anarchist, i.e. Libertarian Communism, and has nothing to do with paying fees or having private companies run the show. Using Libertarian this way is for me a perversion of language.

Anyhow, the story you tell is, simply put, crazy. It's stupid not to have a fire department paid by taxes no matter in which kind of economic system.

Michael Malak said...

In a libertarian world, it would be a private company with the fire trucks, not the government. And a private company would not set the price of on-the-spot fire protection at infinity, but rather at some price based on a combination of actual cost plus punitive rush service -- perhaps $20,000. There were no such private fire companies to answer such a call due to unfair competition from the government (similar to the unfair competition of park rec centers to private gyms, and of public schools to private schools).

Michael Malak said...


There are anarchist and minarchist branches of libertarianism -- I don't get too worked up about the distinction.

The fundamental flaw of libertarianism is that advocates deliberately ignore Coase's theorem, which says that the free market is best whenever transaction costs are zero, but since transaction costs are never zero, there are some things for which it is cheaper for the government to handle.

The low cost, high value, and group benefits of firefighting is one of those service for which it is cheaper for the government to handle.

Maju said...

Michael: I have no idea what is "minarchism", it's not any meaningful ideology as far as I know - because I never heard of it before.

Anyhow, in the USA and Andrew in this post used Libertarian as description of Somalia-like no state (nor any sort of community organization), all mafia, social situation that can only be described as a nightmare or as neofeudalism maybe.

And what I say is that is not within my cultural parameters at all. I mean, if Durruti would get up from his tomb... he'd be pretty angry about this corruption of the democratic communist project's name. Same for Kropotkin and all the others.

George Donnelly said...

This is statist ideology come to life. This fire brigade is run by the government. The government is the inflexible one. Market organizations are flexible. You don't see airlines denying you the ability to fly same day if they have tickets available. They just charge you more. You don't see supermarkets offering just one kind of bread. They sell dozens of kinds at different price points. A market organization could have charged a high price for last minute service and saved the house. But the state isn't that smart. The marketplace of voluntary relationships is.

Maju said...

That's not that way, George: if you already have cancer private health insurances won't insure you. You can always pay a private physician or die (or both) and I guess in this case you can also pay a private fire team... if there is any.

There is not? Let's blame the state! Actually it's a failure of free market: the usual failure that the state has to put for. The invisible hand is nowhere any more real that "God": a belief and not any reality. Free market can work only as long a lot of providers are present but big companies can easily destroy the little guys, so they are not present way too often... unless the state protects them somehow or their economy is so marginal (loses are high, profits extremely low and rare) that the big guys see no interest in grabbing that zone... yet.

The problems of utraliberalism are many but one is that there is never all the offer it is in economical theory books, in fact there is a strong tendency in market dynamics towards monopoly, tendency that can only be tackled by a strong independent state, as happened in the USA for instance a century ago, restoring a more balanced form of market by piecing up compulsorily all too big companies.

Sadly this practice is not done anymore and now it's the oligopolies who piece the government and devour it by means of corrupting politicians and bureaucrats, all perfectly legal and equally dirty and decadent.

Another problems of ultraliberalism is that it cannot exist without a nanny state caring for its basic needs, specially: police, army, law, justice and money. These are state tasks and if removed from the state, the institution that gets them becomes the state.

So if you replace the democratic state by Xe Inc., you have a new state called Xe Inc. And I'm pretty sure this not what the people wants.

Libertarian Communism does not have these problems because it is the community and not irresponsible private corporations which takes all those tasks and also the task of managing economy. Some would say this is also a form of state, fair enough, but the emphasis is in decentralization, participation and both personal and collective autonomy, all without allowing the inequalities caused by the criminal privatization of Earth to arise as private property in general terms would not exist: the economy becomes a democracy.

I am anyhow surprised that the state demands a fee and this fee is optional. That's not the usual state way of doing things but compulsory taxes. So I strongly suspect that there is some private company involved, as often happens today with "privatized" services.

Michael Malak said...


There has never been a stable form of government -- they all devolve into tyranny. However, looking at the service of extinguishing fires in isolation, having the government handle that has worked well for the past century (i.e. after the time of the volunteer bucket brigades), and the dystopia of Fahrenheit 411 doesn't seem to be on the horizon, so there was no reason for Tennessee to tinker with it.

George Donnelly said...

Maju, you ignore the context of state control of the health sector. Prior to Nixon and other state intrusions, you didn't need to have health insurance from a large corporation before you could be treated. It's another case of all-or-nothing from the state.

"Free market can work only as long a lot of providers are present but big companies can easily destroy the little guys"

Have you asked yourself why that happens? Consider all the benefits government hands out to big corporations. It skews the playing field in favor of the big corporations. Among other things, corporations are created by the state and given limited liability, favorable tort law and cheaper government regulations. See a recent study about how it costs large corporations several thousand dollars less per employee than small businesses to comply with state regulations.

You forget that a century ago there was an american state and the corporations of the time were in collaboration with it. In fact, the largest and most dangerous state-corporation monopoly arose around that time - the Federal Reserve.

To suggest libertarians want to replace the state with Blackwater Inc is a red herring. It's simply false. One easy way to show it is this - "incorporated" has no meaning outside the state that incorporates these groups of unaccountable individuals called corporations!

Elsewhere, someone also alleged that this was an outsourced fire brigade. But that's still how the state operates. This faux privatization of giving a monopoly contract to crony corporations is not libertarianism. Libertarianism wants a free and open market for all to enter. It's the war dept that outsources war to blackwater, the injustice dept that outsources its camps to private jails, etc.

Maju said...

I do not know the exact details of healthcare in the USA and I'm sure that you can be treated without insurance if you pay in cash.

I know however that where I live the state guarantees universal healthcare (except most tooth jobs and glasses) and that such universal attention prevents most of us from dying in the streets or having to indebt ourselves heavily in order to prevent that. The "nanny state" is in charge and that is good and what we want (not even the most ultraliberal would dare to touch that).

I would not mind improvements (i.e. the state assumes more general healthcare, specially in teeth and eyes and less waste in ultra-expensive scanners and such but the way it is is alright). Earlier it was like that: unless you had social security you'd be not attended but now healthcare is a public service, just like urban cleaning, park conservation, schooling up to uni level or firefighters. Even there is some shy advance in state guaranteeing of dignified payable housing but there's a long way to go in that aspect, unlike in Switzerland, Germany or the Scandinavian countries, where public housing is more generalized (and that keeps their house markets protected from speculation also).

Doing things half-heartedly may be wrong but not intervening at all is even worse. The state is there to serve the public, not a handful of capitalist vampires (at least in theory), and that's why democracy was invented: to make sure the state fulfilled its role as public service.

Socialists after all only want further extension of democracy, while ultra-liberals want to take from democracy by making services private (hold by private tyrants and not any real "free market" more often than not, and also more often than not paid by the state anyhow). For instance here electricity is "free market", what means that you have to pay a lot to a single possible private provider. It'd be a lot better if it was a public service managed by the state or any other organization that the community gives itself. Similarly in Tennessee they seem to have the same problem with the firefighter service, I understand: it's not anymore public but private.

George Donnelly said...

In some places, they *only* take people with insurance. In other places, people without insurance get a lesser quality of care. In others that do take cash, the prices are exorbitant because the state has bid up prices through its interventions. I speak from experience.

Maju said...

"To suggest libertarians want to replace the state with Blackwater Inc is a red herring. It's simply false".

Libertarians not. I am Libertarian (Anarchist or otherwise democratic Communist), as I said before and take offense with the use of this word to describe ultra-liberalism. At least say something like "Libertarian Capitalists".

In any case, that is the unavoidable result of privatizing society: a Somalia-style reality ruled by mafias. There's no way that private actors can compete fairly unless there's a state to make markets safe, guarantee paper money, regulate against abusive practices and try to guarantee basic services one way or another: from schooling to tap water, from electricity to housing, from transport to cleaning, from firefighters to sewage, from recycling to justice.

"One easy way to show it is this - "incorporated" has no meaning outside the state that incorporates these groups of unaccountable individuals called corporations!"

Well, I agree with your criticism of corporations and I agree that the state guarantees that. After all it is a Capitalist state at the service of the Capitalist oligarchs and in general the bourgeois class and not one strictly at the service of the community as it should.

But if corporations would not exist, it'd be other type of private companies: call them mafias, private militias or whatever. In general if there's no state or equivalent reclaiming the monopoly of violence and guaranteeing a state of law of some type that way, it'd be private organizations who'd take care of violence. In the end it would not matter if it's Xe Inc. or Xe masonic club or Xe 'familia' or Xe Army... the end result is that private actors would have replaced the state in a neofeudal way.

It may happen anyhow, as the Capitalist states seem now weaker and decadent but it's in any case not desirable at all. I prefer Pol Pot, sincerely (though there may be not much difference).

In any case I see "libertarian" ultra-Capitalism as a decadent process, ideological or not. And one that can't but be eventually defeated by something else that can provide at least a principle of morality in social organization, whichever it is. Because private companies have no loyals, just mercenaries (employees), while ideological movements of any sort do have loyals.

And without state to guarantee money anyhow, companies and private individuals would have to return to trade in species, what is the most anti-capitalist (and feudal) concept I can imagine.

"This faux privatization of giving a monopoly contract to crony corporations is not libertarianism".

Maybe but it's indeed Capitalism and something that has been promoted in general since Thatcher and Reagan initiated this late, decadent, phase of Capitalism.

"It's the war dept that outsources war to blackwater, the injustice dept that outsources its camps to private jails, etc".

And how do you propose to do it instead. In theory the state gives contracts to the best bidder, right? How would your "jail free market" be? And anyhow, anticipating answers, how is that different from slavery?

How would your police and defense free market be? And how is that different from a disintegrated state in the hands of warlords?

Stop your empty whining and address the key issues: who would be in your 'utopia' in charge of violence (justice, police, defense, law enforcement)? Who would guarantee money and contracts? Who would guarantee freedoms of all sorts?

And who would defend capitalists from angry armed workers? Let's be serious, please!