Fire Protection as a Public Good

April 25, 2007

The more you look into “public goods,” the more historical evidence you find that suggests that they weren’t always as “public” as we’ve been led to believe, viz., we are taught that certain goods or services cannot be produced on the market, therefore the government must provide them, and therefore taxation is justified in securing the necessary funds to operate the programs that provide them. I previously examined the Lighthouse Problem, after coming across an interview on the subject with Ronald Coase, at Reason a while back. Tonight, I learned about another example

In 1666, the City of London burned to the ground. Shortly thereafter, an Englishman by the name of Nicholas Unless-Jesus-Christ-Had-Died-For-Thee-Thou-Hadst-Been-Damned Barbon (seriously) is generally credited with creating the first sort of fire insurance:

Afterwards, insurance companies formed private fire brigades to protect their clients’ property. Insurance brigades would only fight fires at buildings the company insured. These buildings were identified by a badge or sign.

Today, most properties are insured against fire, either by covenant or regulation, so the free-rider problem is pretty much non-existent.

So, why do we pay taxes for this sort of thing today?

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UPDATE: Russ Roberts, from CafeHayek e-mailed me today to point me to one possible answer: Rent Seeking.  You can read Fred S. McChesney’s “Smoke and Errors” over at Econlib.

Thanks, Russ!


Comments

2 Comments so far

  1. …no third solution » Blog Archive » Public Goods, 1906 September 26, 2007 4:46 pm

    […] Shaw Lumber Co., a private lumber company in the Moosehead Lake region of Maine, in 1906. This is not the first time that the quasi-public good of fire protection was provided by purely private means. But it is yet […]

  2. …no third solution » Blog Archive » Comments on Comments #8 March 5, 2008 10:56 am

    […] Some people used to say that lighthouses were just such a pressing need. Some people argue that fire protection is a pressing need. Those people were wrong. And there is no “pressing need” to eat […]

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