Thursday, April 09, 2009

Are 'free riders' a real problem?

A recent comment (to this column) posed the objection that in a free society, where one would contract voluntarily with a private fire department, if your neighbor's house catches fire and your fire department fights it in order to save your house from damage, the neighbor has benefited from your contract without paying anything. True, as far as it goes.

I suppose you could have a stipulation that your fire department is not to fight fires consuming your neighbors' houses, if they have not also contracted for service, so as not to contribute to their "free-riderhood". The fire department could just sit at your house, hosing it down so the fire doesn't spread to your property. As long as the contract was agreeable to you and your fire department, I suppose you could have just about any conditions put in you like.

Alternately, if your house catches fire and your fire department puts it out, your neighbor has still benefited, since his house is less likely to be damaged now. Or would you prefer that in this case, your fire department set fire to the neighbor's house in order to allow nature to take its course? No, I don't really think anyone would want that.

I think the problem is greatly exaggerated. If people get together to build a bridge, and don't charge a toll for crossing it, does that mean an out-of-town visitor is a "free rider" if he crosses the bridge? He may be crossing the bridge to trade with a business owner who helped pay for the bridge; someone he wouldn't have been able to trade with had the bridge not been built. So is the business owner being cheated since he paid to help build the bridge and the visitor did not? What if this person who crosses the bridge decides to trade with a business owner who also didn't contribute to the construction of the bridge? Does this business owner never trade with the other businesses around him? How did he get the money that he spends in these other stores? Is there no value in keeping his store open for the other people in town?

If people see a benefit for something, they will probably be willing to foot the bill. In a free society, bridges and roads and fire departments would undoubtedly be cheaper and better, since no bureaucracy is eating up the funds and producing nothing but more bureaucracy. There is no reason to whip out coercion to deal with this. A true parasite will suffer the consequences of his decisions regardless whether there is a "government" of any sort to punish him or not.

Besides, everyone will be the "free rider" at times. There is no avoiding it. I think this is only a problem if you look at the situation selfishly or from a "but that's not fair" perspective. Just accept that the times someone else is getting a "free ride" on your dime are paybacks for the times you get the same benefit. It all comes out even in the end, so don't keep a ledger trying to nit-pick every offense. Even if someone seems to come out ahead, are you really willing to give up a little of your liberty to make sure everyone pays in every instance? I'm not.

PS: I just discovered this article which has another, much more detailed take on this: Small-Town Anarchy