Alex Tabarrok, at Marginal Revolution, has a post about firefighters and their work. In it, he
notes that the number of career firefighters has doubled over the last 25 years
while the number of fires has halved. To
put it another way, it’s highly probable that the market has reached its
saturation point for firefighters.
Thus, now may also be a good time for privatizing
firefighting since the risk of fires is declining while the cost of fighting
them is increasing. To put it another
way, the need for firefighters (and presumably the direct demand) is declining
while the practical cost is increasing. We
have an inefficient market since the government serves as the middle man, and
payments are indirect and cannot be opted out of. Thus, privatizing firefighting should help to
significantly reduce costs without significantly reducing the amount of actual
firefighting service provided.
To address the practical objections, I imagine that the most
probable way of handling privatization would be to handle it through insurance
companies. For example, home insurers
would likely make subscribing to a firefighting service a requirement for a
policy. Alternatively, home insurers
might offer discounts to people who subscribe to a firefighting service because
that indicates conscientiousness, which in turns indicates a lower risk of
having the fire in the first place (for if one takes some pains to address
fires, will he not also take others?).
Or insurers could sell subscriptions as a form of insurance (if your
house starts to burn, you’ll be guaranteed that some company will come put out
the fire). This line of reasoning also
extends to landlords as well. Furthermore,
the continued presence of volunteer firefighters suggests that even those who
are too poor to subscribe to a firefighting can still be reasonably assured of
help, much in the same way that poor people used to be assured of charity
health care.
In any event, privatizing firefighting is very
feasible. Not only that, the risk and
transitory pains are, at this point in time, likely the lowest they will ever
be. Maybe it’s time for a change.
