Fighting Fires Privately

 Dr. Harper is a member of the staff of the Foundation for Economic Education. This ar­ticle first appeared in The American Mercury.

 
A spectacular fire broke out in the city of New York on Valentine’s Day, and six fire fighters were killed. Two were members of the City Fire Depart­ment, and the other four were members of the Fire Patrol.

Who are these Fire Patrolmen? They are men privately employed to fight water damage to property while the City Firemen are fight­ing fire with water. A group of nearly 200 fire insurance com­panies hire 180 patrolmen under an organization called the New York Board of Fire Underwriters. Re­sponding to fire calls from four points of departure and using their own trucks and equipment, patrol­men answer all fire alarms — which number about 20,000 yearly in New York . About $25,000,000 in water damage is said to be pre­vented each year by their efforts — about $140,000 per patrolman.

Despite the hazards of such work, the Fire Patrol’s honor roll shows only thirty-two dead during the last hundred years. So four deaths in this one fire is a tragedy of note in their annals.

As frequently happens, the pri­vate Fire Patrol on Valentine’s Day arrived at the scene of the fire before the City Firemen did. In fact, twelve minutes after the first fire alarm sounded there was a cave-in which killed the four pa­trolmen.

But the main point of this story has to do with the processes of self-interest, self-reliance, and pri­vate enterprise. The advocates of more and more governmental serv­ices frequently cite fire fighting as a sure-fire justification for more and more governmental operations. They deny that private processes could possibly do such work.

“What about fire protection?” they ask. “You wouldn’t dare risk that social hazard to the whims and selfish convenience of private citizens, would you? For once a fire broke out, it would spread from house to house because private citizens would not concern them­selves about it until their own house became endangered. So whenever any O’Leary cow kicked over a lantern, entire communi­ties would burn.”

The work of the New York Fire Patrol shows how a voluntary sys­tem of dealing with fires can oper­ate under private endeavor.

1. Persons who want to insure against fire losses rather than to carry their own risks take out policies in insurance com­panies and pool their risks with others.

2. Insurance companies, banding together under a mutual inter­est, hire fire patrolmen to serve them all, thereby reducing the cost of damage claims they would otherwise all have to pay.

It is self-interest that motivates persons to join voluntarily in the mutual insurance plan. It is self-interest that induces the insurance companies to join voluntarily in a fire patrol system. No outsiders are compelled to carry any of the costs involved. In fact, as we shall see, outsiders also benefit.

It would be foolishly expensive for each person to maintain his own fire patrol. It would even be foolishly expensive for each in­surance company to do so, having to wait at the time of each fire to see which company’s policy covers the building that is burning —whose patrol shall go forth to do the job. The owner probably doesn’t remember which company it is, and his insurance policy is probably at the bank or perhaps even in the burning building. The building could burn to the ground during any such delays, leaving nothing for the patrolmen to do when they get there.

So the patrolmen answer every fire alarm promptly without wait­ing to see which company carries the insurance, if any. Such delay would negate their function. Uninsured persons thus get protec­tion, too, and commonly reward the servers after the service has been rendered — insurance of a sort, with payment after the fact, on a basis somewhat different, to be sure, from when a person pays regular insurance premiums in ad­vance.

That is how private, voluntary enterprise takes care of part of this classic problem of fire pro­tection service even in New York where a city fire department is operating under a tax system to pay its costs. Self-interest causes private enterprise to find ways of doing things more promptly and effectively than where the force of monopoly is used to compel par­ticipation. Why shouldn’t inter­ested persons, motivated by self-interest, be more inventive and more sincerely devoted to the search for better ways of doing the job than are disinterested per­sons whose search is motivated primarily by political interests? People left to their own devices will not allow fire damage to per­sist without trying their best to devise ways of preventing it.

The miracle of the voluntary way of pursuing self-interest in no sense denies mutual assistance nor does it even preclude personal sacrifice. It may be argued that people are too ignorant and short­sighted to serve their own inter­ests through voluntary mutual as­sistance; that this must be accomplished by the political route.

Yet the same persons are presumed to have sufficient wisdom to select from among their number a ruler who will use political compulsion unselfishly and wisely.

The voluntary way of doing things cannot, of course, perform the miracle of making people wiser than they are. But the alternative — the involuntary way of monopoly force — prohibits us from attain­ing the full use of the limited wis­dom with which we are endowed.

One thing the voluntary method accomplishes, having almost the appearance of a miracle, is to in­duce competitors to cooperate in phases of their operations where it is mutually advantageous to do so. The fire patrol system is an excel­lent example of this wholesome as­pect of the voluntary way of ren­dering services. Competition does not blind wise competitors to the opportunity of mutual advantage in cooperation, wherever it is deemed to exist. Competition means freeing competitors from the disadvantage of forced co­operation — a highly important right of escape in a progressive society of free persons.

As an expression of respect and mourning for those four patrolmen who were killed rendering fire pro­tection in New York on Valentine’s Day, let us ponder this lesson which might otherwise have gone unnoticed and unlearned.