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
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
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
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