Dealing with freeriders

[eugenekop]

The free markets have a problem of dealing with free riders. For example if I don't pay a firefighter company but my neighbor does, then if my house catches fire the neighbors firefighters will put out the fire in my house so that it wouldn't spread to the neighbor. So here I am, I don't pay for firefighters I get a free service.

Do you think a free market can deal with this in some creative way?

[low preference guy]

why would you let your neighbor know that you paid for fire insurance?

[ChaosControl]

A way of dealing with it is not to have houses so close to one another, don't live in a metro area. Cities are disgusting anyway.

[LisaNY]

Is that how the fire departments work in Israel Eugene? I live in the NY suburbs, my county has all volunteer fire departments for each Town/Village.

[1000-points-of-fright]

What makes you think they wouldn't just let your house burn?

http://www.wpsdlocal6.com/news/local/Firefighters-watch-as-home-burns-to-the-ground-104052668.html

[Acala]

Had a long thread on this not long ago when a subscription fire department stood by and watched the house of a non-subscriber burn to the ground. So, yes, the market can handle it nicely.

And the far better and classic example of the lighthouse as a free rider conundrum is best answered by pointing out that in fact MANY lighthouses were built by private interests on the East coast of the US before government took over.

You are going over ground that has been well-plowed by many authors. Read a book, save some bandwidth.

edit: the crew was all over this before I could even get my post written. Hahahaha

[eugenekop]

Its not that you will rely on your neighbor to put out the fire, your neighbor will just do it if he cares about his own house. You will just be a free rider.

Besides I believe hiding information this way in unethical, there has to be a better solution.

[eugenekop]

Care to recommend an author that explains these things? Is there a book for minarchists that touches on the subjects of: local authorities, firefighting, aviation control, sewage, national parks privatization, electricity and water supply, etc...?

[low preference guy]

Its not that you will rely on your neighbor to put out the fire, your neighbor will just do it if he cares about his own house. You will just be a free rider.

Besides I believe hiding information this way in unethical, there has to be a better solution.

why?

[noxagol]

Walter Block has a lot books on various issues, as well as Murray Rothbard. Go to www.mises.org or www.lewrockwell.com and do some searches.

And it really isn't difficult to imagine how it would work with a little mental effort.

[awake]

What makes you think that you won't be billed? or sued?

[1000-points-of-fright]

Here's the problem with all these "gotcha" scenarios. One can always find exceptions and tragic examples in any system. What about poor people, what about the retarded, what about free riders. etc. There will always be these examples in any system, be it totally free market or totally authoritarian or any where in between.

It's the same "libertarian paradise" accusation I hear all the time. Except it's a false accusation. I don't know any libertarian who says that a totally free society would be a paradise or utopia. There would be problems. But they'd be your problems and you'd be free to solve them as you see fit.

[eugenekop]

What makes you think that you won't be billed? or sued?

Yeah that makes sense.

Nevertheless I think there is a reason that fire departments are run by the state in big cities or in uninhabited places such as big forests. Perhaps it is too difficult to think of a free market solution for these cases.

[pcosmar]

Why would you let your house burn down?
To collect the insurance? Hide evidence?

Why would you rely on a fire dept? They very seldom ever save a home. The show up after the fire is going and attempt to put it out, often doing even more damage to the house.
The home and furnishings are still lost or destroyed. Perhaps part of the structure is saved and can be rebuilt, but rarely.

Why not rely on personal responsibility.
Practice fire safety. Take preventive steps. Install sprinklers or other fire suppression.
Have fire insurance in the unfortunate event of a catastrophe .
Deal with it.

[eugenekop]

It's the same "libertarian paradise" accusation I hear all the time. Except it's a false accusation. I don't know any libertarian who says that a totally free society would be a paradise or utopia. There would be problems. But they'd be your problems and you'd be free to solve them as you see fit.

Still there are things that I am 100% certain should be run by the state, and these are police, courts and army. So you can't say that everything can be run privately. Now I'm not sure about fire departments, but maybe in some cases like big cities or forests far away free market solutions are not as good as government run solutions.

[noxagol]

What makes you think that you won't be billed? or sued?

Well, if a person does something for you without you agreeing to pay for it before hand, you are under no obligation to give them anything.

In fact, they would be at your mercy since they messed with your property without permission.

Suppose I wanted my house to burn down for whatever reason and they put it out. Until my fire actually starts to put the neighbors property on fire, they cannot do anything to my burning blaze as it is not doing anything to their property.

[Acala]

Care to recommend an author that explains these things? Is there a book for minarchists that touches on the subjects of: local authorities, firefighting, aviation control, sewage, national parks privatization, electricity and water supply, etc...?

Now you are talking!!

Mises.org is a great place to start and Walter Block and Rothbard are great authors.

Also check out:

A Market for Liberty by the Tannehills

and

A Liberty Primer by Alan Burris

And as Noxagol suggests, once you master the basics and break out of the mind set that only government can order society, you can figure this stuff our on your own.

[low preference guy]

Still there are things that I am 100% certain should be run by the state, and these are police, courts and army. So you can't say that everything can be run privately. Now I'm not sure about fire departments, but maybe in some cases like big cities or forests far away free market solutions are not as good as government run solutions.

let's think about that idea for a minute.

if the government solution is better, then doing it privately isn't profitable for a company. this implies that the government is losing money in the fire fighting enterprise. which implies that people are funding it against their will. which implies that they would prefer to use that money for something else. which implies that you don't think they should be able to choose the risks they take about their own lives. once you accept that principle, you can justify anything from the war on drugs to anti-obesity regulations.

[Acala]

Yeah that makes sense.

Nevertheless I think there is a reason that fire departments are run by the state in big cities or in uninhabited places such as big forests. Perhaps it is too difficult to think of a free market solution for these cases.

People already answered these questions in other threads.

Fire departments ARE run as volunteer organizations AND as private entities. So the market HAS solved that problem.

Forests should be privately owned and the owners will takes steps to prevent fires and if it is worth the cost, subscribe to fire protection. Otherwise, it burns. And that is fine. Nature can be harsh. Certainly people living in the city should not be taxed to pay for fire protection for people who choose to live a hundred miles away in the forest.

[noxagol]

Not to mention forest fires are also good for the environment. Life grows from death.

[eugenekop]

if the government solution is better, then doing it privately isn't profitable for a company. this implies that the government is losing money in the fire fighting enterprise. which implies that people are funding it against their will. which implies that they would prefer to use that money for something else. which implies that you don't think they should be able to choose the risks they take about their own lives. once you accept that principle, you can justify anything from the war on drugs to anti-obesity regulations.

No, free riders and externalities usually makes government intervention mandatory. For example you can't leave the roads to the free market because you have no way to insure that only those who pay will travel the road.

The same is true for putting out the fire in big forests. If the forest is not a private property then everyone benefits from putting out the fire, but who will pay? Probably no one, because no one wants to be the sucker, no one wants free riders.

[eugenekop]

Forests should be privately owned and the owners

Okay, then I have another question. Which lands in America are being privately owned and which are not? Forests are not privately owned, right? Why then some lands are being privately owned and others are not?

[low preference guy]

No, free riders and externalities usually makes government intervention mandatory. For example you can't leave the roads to the free market because you have no way to insure that only those who pay will travel the road.

The same is true for putting out the fire in big forests. If the forest is not a private property then everyone benefits from putting out the fire, but who will pay? Probably no one, because no one wants to be the sucker, no one wants free riders.

I don't buy your argument. Why can't you just say "everyone benefits from having a society free of drugs"?

[awake]

Well, if a person does something for you without you agreeing to pay for it before hand, you are under no obligation to give them anything.

In fact, they would be at your mercy since they messed with your property without permission.

Suppose I wanted my house to burn down for whatever reason and they put it out. Until my fire actually starts to put the neighbors property on fire, they cannot do anything to my burning blaze as it is not doing anything to their property.

You are correct, I have been at many house fires where radiant heat has damaged another persons home many meters away. So, if the paid up person has protection , it involves defending one house from another... it can be done with specific tools. If the damage was from one house owner upon another it provides for legal action.

[Fox McCloud]

The free markets have a problem of dealing with free riders. For example if I don't pay a firefighter company but my neighbor does, then if my house catches fire the neighbors firefighters will put out the fire in my house so that it wouldn't spread to the neighbor. So here I am, I don't pay for firefighters I get a free service.

Do you think a free market can deal with this in some creative way?

no, they wouldn't, they'd only act if the neighbor's house started taking damage of any sort.

If they were forced into putting it out, then they'd probably sue you (or the owner would) for damages to his own home (Unless it was arson, of course).

[dannno]

LOL, you think if we went back to a free market system that there would be MORE free riders than today :confused:

[eugenekop]

I don't buy your argument. Why can't you just say "everyone benefits from having a society free of drugs"?

Buying a drug is your personal choice, there are relatively few positive or negative externalities. However with roads there are very significant externalities.


LOL, you think if we went back to a free market system that there would be MORE free riders than today

Yes you are right about that. With governments there are A LOT of free riders.

[Austrian Econ Disciple]

Hoppe totally refutes this absurd 'free-rider' problem in the first pages of The Economics and Ethics of Private Property. In fact, it is no such problem, and moreover, why do you assume the firefighting service will put out the fire of a non-subscriber? They would of course, seek all avenues to have him pay for their service, but it won't be free, and if the person would rather his house burn than pay, then the firefighters will be there to make sure that the fire does not jump from his house, to yours. I imagine there are lots of creative ways to come to a solution, and in any event, the State solution of stealing from everyone, is no solution at all.

http://mises.org/books/economicsethics.pdf

Seriously just read the first 10 pages and you will have your refutation of 'public goods theory' or the illusory 'free-rider' non-problem.

[awake]

A man may choose to fire protect his home himself, much like a gun owner provides first line property protection.

[EndSlavery]

Every libertarian should know about Assurance Contracts (http://en.wikipedia.org/wiki/Assurance_contract) as a solution to free rider problems. It's an easy way to get good ideas created in the absence of a police IP-state.

[sailingaway]

The free markets have a problem of dealing with free riders. For example if I don't pay a firefighter company but my neighbor does, then if my house catches fire the neighbors firefighters will put out the fire in my house so that it wouldn't spread to the neighbor. So here I am, I don't pay for firefighters I get a free service.

Do you think a free market can deal with this in some creative way?

penalty payment -- if you use but haven't paid for you pay X times the annual amount?

[axiomata]

No, free riders and externalities usually makes government intervention mandatory. For example you can't leave the roads to the free market because you have no way to insure that only those who pay will travel the road.

The same is true for putting out the fire in big forests. If the forest is not a private property then everyone benefits from putting out the fire, but who will pay? Probably no one, because no one wants to be the sucker, no one wants free riders.

You've got it backwards. It is governments who have a problem of creating free riders (and often making things worse by trying to compensate.) A combination of more fully defined private property rights and voluntary user associations for more difficult common pool resource problems would do away with free rider problems.

You can leave roads to the free market. You can have tolls. For a new "freeway" to Las Vegas a voluntary association of Casinos and other Vegas business could fund it. Even local roads could be managed by neighborhoods. My city of St. Louis does this. They are called Private Places (https://secure.wikimedia.org/wikipedia/en/wiki/Private_place) and homeowners on such streets have incentive to maintain, patrol, and develop the streets not only for safety and efficiency, but a nice street increases the resale value of their homes.

http://upload.wikimedia.org/wikipedia/en/c/c9/Washington_terrace_gate_st._louis.jpg

You are right about forest fires, but you must recognize that the problem arises from the lack of private property, not the nature of man to free ride when it is available.

[eugenekop]

Assurance contract

Can you give an example of the use of this type of contract in today's world?

[eugenekop]

Hoppe totally refutes this absurd 'free-rider' problem in the first pages of The Economics and Ethics of Private Property. In fact, it is no such problem, and moreover, why do you assume the firefighting service will put out the fire of a non-subscriber? They would of course, seek all avenues to have him pay for their service, but it won't be free, and if the person would rather his house burn than pay, then the firefighters will be there to make sure that the fire does not jump from his house, to yours. I imagine there are lots of creative ways to come to a solution, and in any event, the State solution of stealing from everyone, is no solution at all.

http://mises.org/books/economicsethics.pdf

Seriously just read the first 10 pages and you will have your refutation of 'public goods theory' or the illusory 'free-rider' non-problem.

Thank you, I'll read it.