by Alex Massie
At the American Spectator (arrivistes!) Iain Murray and Matthew Melchiorre report on the success of a privatised fire service in Chatham County, Georgia:
Free riders bankrupted London's fire insurance companies by taking advantage of their fire services, but the free rider problem is not insurmountable. Had the two services been operated separately, the insurers could have incentivized the purchase of fire company subscriptions by offering clients discounts on premiums. Meanwhile, the fire company could have averted losses by billing non-subscribers for its services. Such a system actually exists today in Chatham County, Georgia, at the Southside Fire Department (SSFD), a privately run and subscription-funded fire, EMS, and security company.
The SSFD began in 1961 with only $10,000 and a handful of entrepreneurial volunteer firemen who bought a fire truck and offered subscription-based fire protection to the residents of the then-unincorporated southern section of the county. Today, the SSFD has a budget of $10 million and provides fire prevention and suppression services to half of Chatham County at a net financial gain to subscribers, as the discount offered on the homeowner's insurance premium from purchasing a subscription outweighs the cost of the subscription itself.
This is an elegant solution. Lest you think the idea of privatised fire services is the preserve of heartless Randian nutters* in the Deep South, consider that Danish fire (and ambulance) services have largely been run by private companies for more than 80 years. The lesson of this is that public service provision – even of "core" functions of the state – should not be a matter determined by partisan orthodoxy.
In Britain, David Cameron's big idea is that public services should be opened up to competition. In this he draws from the better aspects of both the American and Scandinavian approaches. Progress is being made but neither quickly nor surely enough. Decentralisation is the mantra but, because of Liberal Democrat illiberalism and press paranoia about the private sector, some of the reforms have been watered down and there'll be less flexibility in service provision than there could be.
*No hate-mail please. Rand doesn't do much for me but I know plenty of lovely people who have at least some time for her. They're not really nutters either.
The Dish 