A fire in a rural Tennessee community has sparked a considerable amount of debate recently. A man, having failed to pay a required $75 fee, was refused the services of a local fire department; even after the home owner pleaded and agreed to pay for the service. Progressive commentators quickly jumped on the incident as an illustration of the dangers of the free market. Keith Olbermann for example used the incident to bash free market boosters within the Tea Party movement. In its coverage of the story, Slate side by sided a picture of Free Market economist FA Hayek with a burning house. Even conservatives have jumped on the band wagon, using the incident as a warning to other conservatives to tamp down their enthusiasm for free market policies.
The argument is pure straw-man. The fire department was following local government policy. Had this truly been a case of free market economics at work, the outcome of this story would have been considerably different for several reasons:
1) He would not be refused service; he would have been billed for it after the fact. The $75 dollar fee would have been more akin to an insurance payment to cover your fire protection for the year. However, failure to pay the insurance fee would not have led to denial of service once the house was on fire; he would simply have been billed full price for the service after it had been rendered.
2) While the man might not have his house, he still has his freedom. If this had been a compulsory tax that the man had refused to pay he wouldn’t simply have lost his house, he would have been incarcerated for tax evasion.
3) The refusal of service is usually the strong-arm tactic of monopolistic entities. In this case, that monopolistic entity was the fire-department of South Fulton. Under free market conditions, allowing houses to burn down would not be acceptable and local consumers of fire prevention services would chose to patronize providers who aren’t so crass. The government fire department, in this case, will most likely not be held to account for having allowed the house to burn, as firemen were simply following GOVERNMENT POLICY.
Don’t believe the attacks on the market. The outcome of this incident lies purely on the shoulders of government established and protected monopoly of service.