[net.politics] Libertarianism in the real world: private fire protection

fagin@ucbvax.ARPA (Barry Steven Fagin) (03/15/85)

Most people believe that fire protection is an essential service that
governments must provide.  In fact, there are now fourteen private fire
protection agencies in operation, up from none a few years ago.  These
agencies charge a subscription fee for their services, based on the
dollar value of property protected.  Valley Fire Service, for example, 
a private fire protection service that operates in Grants Pass, Oregon, 
charges $2.15 per $1000 of market value of structures located on the
protected property if the property is located within five miles of one of their 
stations. If the property is situated further away, the fee lowers to $1.15 per 
$1K.  (This is because of the longer response time involved and the lower 
probability of saving the property intact).  By contrast, the tax rate of 
Jackson County District 5 Fire Services, a nearby tax-supported fire protection 
operation, is $5.92 per $1K of the *assessed* value of the *total* property.

To see more closely how the two compare, this table considers three 
dwellings, and computes the cost of fire protection for Valley Fire and
District 5.  The dollar values shown for Valley Fire are market values,
while those for District 5 are assessed values.

DWELLING NO 1		Valley Fire	District 5

Land			$97,610		$81,571
Improvements		43,960		36,160
Total			141,470		117,731
Annual cost		$94.51		$696.97

DWELLING NO. 2
Land			$23,310		$19,021
Improvements		$52,010		$42,440
Total			$75,320		$61,461
Annual Cost		$111.51		$363.85

DWELLING NO. 3
Land			$24,000		$19,584
Improvements		$14,800		$12,077
Total			$38,800		$31,661
Annual Cost		$31.82		$187.43

Valley Fire also offers its subscribers some important features not
usually provided by government-operated services.  For example, when signing 
a contract that states what the company will do in return for its fee, 
subscribers are asked to specify structures to receive priority protection, any 
water sources on the property, the number of occupants in the houses, the number
of invalids, and any obstacles to approaching the property.  

Doubtless some posters will wonder what happens if your house catches
fire and you're not a subscriber.  It turns out that Valley Fire will
still respond and put out your fire, and then attempt to collect a very
expensive fee ($150 per fire engine per hour, $10 per firefighter per
hour).  Valley Fire reports that the collection rate is pretty low.
My guess is that they do it anyway because letting people's houses burn
down when you're a fire protection company is bad for business.  Imagine
how it would look if the local TV station found out: "Greedy profit-making
company lets widow's house burn to ground.  Film at eleven ..."

So if your local government is facing a finanical crunch, trying to figure
out how to balance budgets without cutting back "essential" services, show
up at the next city council meeting and suggest the libertarian concept
of privatization as a possible alternative.  

--Barry
-- 
Barry Fagin @ University of California, Berkeley