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naraburns  nihil supernum  1yr ago (text post)   32370 thread views

Culture War Roundup for the week of January 23, 2023

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Fighting fires costs time and money. If he is obliged to fight fires for people who didn't pay him, he'd go broke. It just looks bad because the firefighters are physically standing next to the fire, but standing next to it and not fighting it is no worse than being far away and not fighting it.

Would you quote it the same way if a supermarket was refusing to give away food to someone who couldn't pay?

I'm not making an anticapitalist / anti-paying-for-insurance argument here - the key phrase is a miserable price, and often leased the properties to their original owners or new tenants. Compare this to healthcare pricing - during an emergency, your 'willingness to pay' is limited only by your wealth, and the hospital you are at / crassus's fire brigade can demand much higher prices than they could in a competitive market because they have no competition at the moment of emergency, a problem (sort of) solved by paying for insurance from competing providers. It's possible wikipedia is overstating that, but other sources seem to agree. Even if that's untrue, the other bits are similarly antisocial.

If he had no firefighters and he was just a real estate developer buying up burned properties for pittances, nobody would complain. Adding the firefighters increases his profit, but it doesn't make the situation worse--losing your house from fire is no better than losing your house this way.

There's also nothing preventing another company from offering "I'll do this and charge half the rent on the lease", leading to a price war that makes the price for the service go down to the point where nobody loses their house.

In general, using monopoly power of any kind to demand prices significantly above the "ideal" market price is (currently) considered bad and antisocial. Even moreso if the thing extorted was "your house" instead of eggs. The same is true of a hospital - sure, "without the hospital, the person just dies", but "give me your life savings or i won't stop the bleeding" is still "antisocial". Economics describes this as "the producer extracting all the surplus". If the cost to crassus of putting out fires is much smaller than the price he demands, and he uses this to extract wealth, that's ... 'antisocial', in the sense it's worse for society than demanding only a bit above cost.

Note that (again, according to wikipedia in vague language, notanexpert, might be wrong) the privately owned system of firefighting became ineffective, and was replaced with a volunteer force.

This led to

"A major duty of the Vigiles was to enforce preventative measures against conflagrations. Adequate fire fighting equipment was required in every home. The Digest of Justinian decrees that Vigiles are "ordered to remind every one to have a supply of water ready in his upper room". While the Vigiles only had advising authority, their recommendations were often followed to avoid repercussions for negligence."

Which is something crassus's force would ... not be incentivized to do.

It's much easier to have a price war over food or steel, which buyers regularly buy large amounts of, can choose the time and place of purchase, and have many sellers, all of which give buyers opportunity and motive to inform themselves and select low prices, than something like a fire or rare medical emergencies, which satisfy none of those. (And history doesn't record several roman firefighting startups pushing the price down a year after crassus's thing began - and even if they did, unless multiple show up to the same fire, extortionate pricing would remain).

If he had no firefighters and he was just a real estate developer buying up burned properties for pittances, nobody would complain

... not about him, but people would certainly complain about the un-fought fires. It may be better for a steel factory that illegally dumps runoff into rivers to exist than not, considering the many benefits of steel, but it's still very bad to dump it!

In some ways, markets and free exchange are very effective in coordination! In other ways, they aren't, and 'it's all voluntary' doesn't mean every action is moral.

In general, using monopoly power of any kind to demand prices significantly above the "ideal" market price is (currently) considered bad and antisocial.

Your description only says that he used monopoly power in the sense of being the only company around--not that he did anything to prevent other companies from being created and competing with him.

It's much easier to have a price war over food or steel,..., than something like a fire or rare medical emergencies... unless multiple show up to the same fire, extortionate pricing would remain).

Why wouldn't someone create another company, which would also show up? It sounds like there's information you're leaving out.

One problem is that the same power over prices exists if crassus is the only one to show up to any specific fire, even if other companies exist. This makes market competition and price discovery much harder. Compare this to: multiple hospitals exist, but you have a heart attack and are only delivered to one. If his company shows up to some fires, and other companies show up to other fires ... and cartels like this are a very common phenomenon in businesses today.

Another problem is that this is ... ancient rome, not exactly a well oiled machine for free enterprise. Startup costs, frictions, and risk of 'you get your property stolen because higher status person dislikes you' were higher than today.

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