Wednesday, October 6, 2010

David Henderson, Libertarianism, and Burning Houses

I'm sure by now everyone has heard about the Obion County fire department that would not respond to a fire because the resident did not pay their fire protection fee. I wasn't planning on covering it until I saw this post from David Henderson this morning. He makes a good criticism of this Salon article blaming the situation on libertarianism. Henderson's response is that this wasn't actually a libertarian situation - it was still a government fire department taking fees, after all! Fair enough, I can buy that. But then Henderson completely fails to apply the same logic to himself when he blames the fire on the Salon author and "statists" (whoever the hell they are - I imagine I qualify in his mind). But if the Obion County fire department isn't the responsibility of libertarians, it's certainly not the responsibility of non-libertarians who think that fire protection services should not be fee for service. This isn't the first time Henderson has made a reasonable critique of a situation and then completely failed to apply it to himself - I called Henderson out on it here as well, and he recanted. Will he this time?

It's just sloppy logic. Why is it that so many libertarians see anything done wrong by the government and latch on to it as proof that anything but libertarianism is bankrupt, as if non-libertarians are responsible for everything and anything the government does. That makes no more sense than blaming anything a corporation does or a private citizen does on libertarians. And in fact it makes even less sense than that because it gives the impression that the government is the only source of agency or action for non-libertarians. Why does government misconduct get blamed on non-libertarians and not private corporate misconduct (non-libertarians are in favor of the free enterprise system, after all). It's not even considered because it is often assumed the primary institution of social agency for non-libertarians is the government.

Anyway - very odd and very asymmetric.

I think the fire shows us that there are limits to fee-for-service and contracting in government. The conspicuous absence of private fire services is also notable. You would think in a county where the public fire service was opt-in you would have competing private fire services, right? If the county was charging $75, you'd expect a private firm to charge $72.50, right? The lack of such a service is extremely telling, and while this incident doesn't say anything about libertarianism per se (I agree with Henderson on that), it does suggest how a private market would handle this.

What would we see in a private market for fire services? Spotty coverage, for one thing. You wouldn't see all areas with fire service coverage. Wealthier communities would be more lucrative because they have more to protect and have a greater ability to pay, although the cost of stopping the fire would probably be comparable to the cost of stopping a fire in low-income areas. Since low-income areas are not cross-subsidized by the tax dollars of wealthier residents, they'll have less to spend on other things and may voluntarily forgo fire protection in favor of other goods.

In 1736 when Benjamin Franklin established the Union Fire Company this may have made a great deal of sense (although I'm not even sure this is a for-profit company - I've found no evidence that it was). But in an era where we can provide universal fire coverage and cross subsidization is nominal it's hard to argue that social welfare isn't best served by a public fire department - that a low-income area's effective demand represents the utility derived from fire protection services in any reasonable way. So Henderson is right - this does not directly reflect on libertarianism. But we can see that moving towards a fee-for-service system is extremely problematic in this case, and we can reasonably foresee what a market for this service would be like. Instead of playing the blame game - instead of calling everything that the government does wrong the fault of non-libertarianism and everything the market does wrong the fault of libertarianism, it seems to me it makes more sense to predict how different systems would respond and then consider which we prefer. After all, neither libertarians nor non-libertarians predict that entrepreneurs will always get it right (that's sort of the point of entrepreneurship), and non-libertarians don't predict the government will always get it right. So let's stop pretending this is an article of faith or a necessary assumption for everyone when it's clearly not.

Do you want to live in a society where:
(1.) protection from the ravages of fire are dependent on your ability to pay and the ability of your neighbors to pay (because if your neighbors won't pay there's going to be less coverage in your area), and many people don't get protection from fire, or

(2.) protection from the ravages of fire is free to be provided by public or private fire services, but if you don't pay a fee you don't get the protection, and many people don't get protection from fire, or

(3.) protection from the ravages of fire is such a basic and easy service to provide in the twenty first century that it is publicly provided without a fee, out of tax dollars where inevitably high income families will cross-subsidize the low income families.

If you firmly believe that tax is theft and democracy is tyranny and the litany of other cliches, then I suppose number three sounds ridiculous. My feeling is, if number three counts as "statist", then people have lost all sense of proportion and we've let our institutional tools become our masters.

25 comments:

  1. The single sentence in question is this one:

    "But it's bizarre for a statist to attack libertarians when his own statist alternative works out badly."

    It is amazing the sorts of silly narratives that you spin out of single sentence. The point of Henderson's statement is that promises which statists make about their programs are never met, indeed, they don't even come close to meeting those promises.

    "If the county was charging $75, you'd expect a private firm to charge $72.50, right?"

    It was the city that was providing the service, not the county. Apparently there is no Obion county fire fighting service.

    "Spotty coverage, for one thing. You wouldn't see all areas with fire service coverage."

    Which is what apparently one gets with publicly funded fire fighting services.

    "But in an era where we can provide universal fire coverage and cross subsidization is nominal it's hard to argue that social welfare isn't best served by a public fire department..."

    There is no such thing as "universal fire coverage" anywhere in the world - just like there is no such thing as "universal health care." The state is always going to find some way to limit coverage because resources are finite as well as due to the usual corruption, etc. issues. Statists are always getting the cart before the horse in this regard.

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  2. In other words, statists are always hung by their own petard - by what they over-promise.

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  3. "It is amazing the sorts of silly narratives that you spin out of single sentence. The point of Henderson's statement is that promises which statists make about their programs are never met, indeed, they don't even come close to meeting those promises."

    Who is the statist here? What promises did they make? Why is Henderson saying that the Salon author has to justify an arrangement he opposes in the same breath that Henderson criticizes the Salon author for attributing a policy to libertarians that they oppose?

    What "statist alternative" is Henderson even talking about here? Assuming Henderson is just sloppily using "statist" to describe non-libertarians, why does he think that what happened in Tennessee represents their position?

    The "narrative that I spin" is simply that it's crazy to think of everything any government ever does as the proposed alternative to libertarianism. It's not.

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  4. "Which is what apparently one gets with publicly funded fire fighting services."

    Care to elaborate???? Examples??? And even if publicly funded fire fighting services don't have perfect coverage, why would you expect them to have worse coverage than a market where no cross-subsidization by wealthier taxpayers occurs?

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  5. Daniel,

    Presumably the statists are the people that Henderson is referring to. That seems obvious from the piece.

    "...why does he think that what happened in Tennessee represents their position?"

    It represents the result of their position. Again, statists over-promise what they can provide by their measures, and then when that comes to fruition they blame "the market" or "libertarians' or what have you for that result.

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  6. "...why would you expect them to have worse coverage than a market where no cross-subsidization by wealthier taxpayers occurs?"

    First of all, in the marketplace that cross-subsidization is not required though it would of course occur to a great degree; which is why we have volunteer, non-government funded fire departments in the U.S. - lots of them (I know this via direct experience - many of relatives are volunteer fire fighters).

    Anyway, public funding doesn't really guarantee anything - which is why publicly funded hospitals engage in indigent patient dumping. Which is also why statists ought to drop agitprop phrases like "universal health care."

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  7. I see that your post are going more and more hysterical. How are you two gays doing?

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  8. Xenophon -
    Well you're just restating what you said before. Who are these statists and when did they promise that when you transition from publicly provided fire protection to fee for service public fire protection you would get a good result?

    Again - you're misusing the word "market" to be synonymous with "private". VFD are not market institutions - they may or may not be supported by public funding (a lot are). Just because the firefighter himself is a volunteer doesn't mean that the expenses of the enterprise aren't paid by tax dollars. In many cases for VFDs they are.

    Don't promote the market by twisting the very word "market" and citing non-market activities. The market has a lot going for it - it doesn't need confusion or distortions for its defense.

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  9. Niko - what's hysterical about it?

    So far I'm the only blog post on this fire that I'm aware of that hasn't used this tragedy to blame an opposing ideology.

    What exactly am I hysterical about?

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  10. Daniel,

    (a) I am not "twisting" anything. That I don't accept the stilted, artificial definition of "the market" put forward by the left-wing/prog of the discipline of economics isn't some sort of secret or anything.

    (b) Most VFDs are not taxpayer funded; they are in fact funded by things like potlucks and other voluntary activities. Definitely an anti-statist approach to the co-ordination problem.

    (c) "Who are these statists and when did they promise that when you transition from publicly provided fire protection to fee for service public fire protection you would get a good result?"

    Ahh, that was actually how they were promoted in the 19th century when publicly funded fire services came into being in the U.S. (so as to benefit the politically well connected). There is a fair amount of research done on this subject.

    Anyway, get set for lots and lots more private firefighting (indeed, the last two decades has shown an explosion in such as state has demonstrated its inability to deal with the issue of the risk of fire).

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  11. I have told you recently that if you use the word "market" on here you either need to use the traditional definition used by economists or you need to clarify when you use it.

    You keep using it to be synonymous with "private action", confusing the discussion.

    That I don't accept the stilted, artificial definition of "the market" put forward by the left-wing/prog of the discipline of economics isn't some sort of secret or anything.

    Left wing? Market exchange has a specific understanding for any economist. And I don't even want to get into the fact that I'm certainly not "left-wing" and I use that definition. What exactly is "left-wing" about the definition anyway? It's not that it's "secret" - it's that your arguments have no correspondence with what I'm talking about if you use different definitions.

    Most VFDs are not taxpayer funded; they are in fact funded by things like potlucks and other voluntary activities. Definitely an anti-statist approach to the co-ordination problem.

    Do you have evidence that "most" aren't? I honestly don't know and am just curious. Clearly their funding comes from multiple sources - I'm not saying it's entirely state funded. How is this an "anti-statist" approach? Isn't it simply a "non-state" approach. And again - what the hell do you mean by "statist" anyway?

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  12. by the way - thanks for saying "private fire fighting" and not "market fire fighting". Private fire fighting could do a lot of good, particularly if public funding can supplement it when necessary. What I hope we don't see is a dependence on market-based fire fighting or fee for service firefighting.

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  13. "You keep using it to be synonymous with "private action", confusing the discussion."

    You appeared to know exactly what I meant from the get go.

    In this context statism refers to what is generally described as economic statism - the view that the state has some very large role in the economy. See, there is the state and there is the society; they are different entities which interact; the state as a rule is hostile to an open society which works outside the purview of the state.

    "Market exchange has a specific understanding for any economist."

    I disagree. Hayek clearly used the term market to describe the constellation of private, voluntary activities that individuals engage in daily - and that's not surprising because how we deal with business exchanges is but a sub-set of human life that is mirrored elsewhere.

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  14. That's an interesting dichotomy. You don't think the state is encompassed within society?

    I can't speak for Hayek on this point - do you have specific examples? It's precisely because market activity is a sub-set of human life that it is worth thinking of it as a distinct process, even while acknowledge its interconnectedness with other facets of life.

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  15. I want fee for service firefighting myself; it should dramatically drive down the price.

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  16. I brushed my teeth this morning - is that market activity?

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  17. So what qualifies as a "large role" for government? This is still sounding like it's going to end up as a euphemism for "non-libertarian".

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  18. No, the state and society are in a constant struggle one with the other. It was the thought of people like Hamilton that the state was the servant of society; or of "the people." Which is partly why Hamilton saw no need for a bill of rights.

    My view is considerably more old fashioned.

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  19. 1. You can understand that the state is part of society and is sometimes hostile, sometimes not, to other elements of society, and still see a need for a bill of rights. I do, after all.

    2. What view of yours is more old fashioned than Hamilton? Wouldn't it be contemporary?

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  20. Daniel,

    Someone had to sell you that toothbrush, right? You're just at the end of a production and distribution chain as well as at the end of a chain of voluntary socialization.

    What qualifies? Well, planning obviously; state owned industries; and on down the line.

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  21. No, my view of the state and society probably arises sometime in the 16th century.

    No, the state and society are separate - or at least that is my view. There are people who disagree with this P.O.V.

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  22. Industrious and clever: http://xkcd.com/802_large/

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  23. "...protection from the ravages of fire is such a basic and easy service to provide in the twenty first century..."

    Eh? Since when? Firetrucks are expensive, fire hydrants are expensive, and the profession of firefighter itself is extraordinarily dangerous. Not to mention the fact that you need to have staff on call 24/7.

    Sure, its easier comparatively, but its still by no means easy.


    Anyway, more interesting than all this partisan fighting (that Salon article was practically an example of Poe's Law) I find is the fact that his home insurance company failed to take into account his decision to opt-out of the firefighting service. Is this market failure? Or is it simply not worth it for the insurance company to check for this, given that most places have some sort of universal firefighting service?

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  24. derp you completely misrepresent my point about "easy to provide", which I think you realize

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  25. Oh, that's pretty sloppy of me. I must have seen that "1732" earlier in the post and connected that with the "21st century" somehow instead of the actual point you were making about cross-subsidies. Apologies.

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