Moral hazard from Sicilian volunteers

by on August 10, 2017 at 12:58 am in Economics, Law | Permalink

Fifteen volunteer firefighters have been arrested in Sicily on suspicion of starting wildfires and reporting non-existent blazes so they could earn €10 (£9) an hour for putting them out.

Police in Ragusa province, in the south of the Mediterranean island, said the fire department became suspicious when it emerged that the auxiliary brigade had responded to 120 incidents compared with just 40 tackled by other volunteer teams over the same period.

The brigade commander, a refrigeration technician identified as DDV, was deemed dangerous enough to be held under house arrest, the Ansa news agency reported, because he was suspected off continuing to start fires after others had stopped.

Most of the remaining team members, whose private phone calls were recorded as part of the investigation, have since admitted calling the 115 emergency number or getting friends or relatives to do so.

Here is the full story.

1 Saint-Frusquin August 10, 2017 at 1:10 am

Same whenever the population delegates any service to the public.

Working to make your business grow is the entrepreneurial spirit the West craves for : reap what you sow

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2 Massimo August 10, 2017 at 2:32 am

I do not understand the comment. The first part seems: “Everytime the dead hand of the State is responsible of a service, somebody feeds off its carcass”, which is true. The second seems: “in the culture of the West, people try to make more money” which is also true, although I would say it applies to the human beings in general. And then you seems to finish with: “there is nothing to do”.

The solution is actually simple: do not use the State.

Consider the origin of these summer fires: Most start or are started in public land, because nobody really cares about public lands. Public land is against nature, in the literal sense, against human nature. Another big chunks are started in private land by owners that want to be able to use the land as they see fit, and not as a bureaucrat sees fit.

Consider the firefighting: when it is public, all type of costs of agency appear, like in this case. If these functions were provided by private enterprises, most of those costs of agencies would be eliminated.

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3 dan1111 August 10, 2017 at 3:02 am

I’m generally skeptical of the ability of government to deliver services effectively. However, I think it’s worth pointing out that firefighting is performed by government almost everywhere, and it hardly ever leads to firefighters intentionally starting fires in order to secure their livelihood.

Also, you would be hard pressed to find any place in the West with worse governance than Sicily, and even there it was apparently happening in only one province out of nine, and the perpetrators got caught.

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4 Anon7 August 10, 2017 at 4:35 am

Yes, incentives matter. Why would salaried government firefighters create more work for themselves and risk their salaries and even nicer pensions that not even governors enthralled to the big, bad Koch brothers are willing to cut?

If Sicily had better governance it would hire a greedy for-profit firm like Falck, which provides Denmark with 65% of its fire brigades (Bernie, you don’t say!).

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5 dan1111 August 10, 2017 at 4:39 am

Firefighting is an infrequent (and seasonal) activity. Often salaried government firefighters don’t spend that much time fighting fires (as covered by Alex here in the past).

It’s quite possible that paying people by the hour to fight fires when they arise is a better model than having permanent salaried staff–even given the perverse incentive problem.

6 Anon7 August 10, 2017 at 5:46 am

That’s why Falck’s model is to have firefighters train to do other tasks too so they don’t sit idle so much, but that would probably offend other government bureaucrats (and the mafia) doing those other jobs.

7 Massimo August 10, 2017 at 4:42 am

The fact that they caught one group, does not imply that only that one was doing it. Knowing Sicily, it is more likely that a competing faction blew the whistle, or they were simply too greedy or careless.

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8 Thiago Ribeiro August 10, 2017 at 8:45 am

“However, I think it’s worth pointing out that firefighting is performed by government almost everywhere, and it hardly ever leads to firefighters intentionally starting fires in order to secure their livelihood.”

That is the beauty of the Brazilian system. Firedighters are paid a fixed amount, no matter how many fires they put down. This way, they won’t feel tempted to start more fires to complement their earnings. Also, they can not be fired, so their livehoods do not depend on the existence of fires.

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9 The Other Jim August 10, 2017 at 9:58 am

Nor do they have any motivation to get off their arse and put out a real fire, to say nothing of actually risking themselves. After all, they can’t be fired.

Great system. It helps to explain why Brazil is the hellhole that it is. [Not that you’ve ever been there.]

10 Thiago Ribeiro August 10, 2017 at 11:04 am

I do not expect an American to understand what honor and principles are. But Brazilian firefighters are paramilitary, they can not be fired at the whims of bean counters (as soldiers can not, either). They fire for the fatherland. Brazilian soldiers are known to never surrender ( https://books.google.com.br/books?id=8zphhcVRroAC&pg=PA211&lpg=PA211&dq=“my+blood+and”+”antônio+joao”&source=bl&ots=nIMZOdkhtq&sig=LarW0QH2glHkySL6qCVHuPLJf8M&hl=pt-BR&sa=X&ved=0ahUKEwjW1JaO98zVAhXCQpAKHeHtBtwQ6AEIITAC#v=onepage&q=%22my%20blood%20and%22%20%22ant%C3%B4nio%20joao%22&f=false ) and storm well-guarded enemy positions. I do not know how the American Army works (badly if it can’t defeat your former mujahideen friends and needs to recruit dforeign mercenaries), but I guess it is well different from how Brazil’s uniformed services work.

11 Harun August 10, 2017 at 1:12 pm

“it hardly ever leads to firefighters intentionally starting fires”

Are you sure about that?

“it has been reported that roughly 100 U.S. firefighters are convicted of arson each year”

https://en.wikipedia.org/wiki/Firefighter_arson

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12 Harun August 10, 2017 at 1:12 pm

100 convictions!!!!!! annually.

13 dan1111 August 11, 2017 at 5:26 am

I know there is a significant issue with firefighters committing arson, but I don’t think their motive is usually to make money.

14 Thiago Ribeiro August 10, 2017 at 8:49 am

“these functions were provided by private enterprises, most of those costs of agencies would be eliminated.”
Evidently no “legitimate busninessman” in Sicily would ever feel tempted to start fires to get more money for his business…

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15 Massimo August 10, 2017 at 9:37 am

With private firefighters you avoid the army of useless and/or absenteist firemen like in Brasil.

With land privatization you eliminate most arsonism because there is at the very least somebody who cares, the owner of the land. Nobody washes a rented car, said Friedman, but he could have said “nobody looks for arsonists very hard, in case of “public” property”.

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16 Thiago Ribeiro August 10, 2017 at 9:48 am

Brazil firefighters are among the best in the world. Firefighters (and police) are auxiliary forceof the Army. We do not hire mercenary soldiers (as opposed to America, that has to recruit foreign people be ause Americans won’t fight for their own country – it is like the foederati all again), we do not need mercenary firefighters.

17 Anon7 August 10, 2017 at 4:28 pm

Yes, the Brazilian system is the best in the world. No doubt all of that free time will allow the Brazilian men’s soccer team to retain it’s #1 title at the World Police and Fire Games being held in Los Angeles right now. Perhaps the Brazilian team could give LA’s police and firefighters a few tips for their upcoming hosting duties for the 2028 Olympics.

18 Thiago Ribeiro August 10, 2017 at 4:30 pm

The main tip is: expect no gratitude from ungrateful foreigners, they are constitutionally uncapable of being grateful. We spent money we did not have to please unpleaseable ungratefuforeigners.l

19 Steve Sailer August 10, 2017 at 1:18 am

Besides the money, fires are fascinating.

Some volunteer firemen in small towns have been known to start fires because, even if you are not getting paid, it’s so much fun to ride on the fire truck with the alarm sounding and put the fire out with your buddies.

A lot of firemen were firebugs when they were boys. Most of them have redirected their fascination with fire in a socially constructive manner into putting out fires.

But, it’s not unknown for a few to be arsonists on the side.

Joseph Wambaugh wrote a nonfiction book, The Fire Lover, about a police arson investigator in SoCal who set dozens of major fires in retail outlets, including one my mother shopped at frequently.

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20 Thiago Ribeiro August 10, 2017 at 9:02 am

Some men just want to watch the world burn. We didn’t start the fire. It was always burning since the world’s been turning. We didn’t start the fire. No, we didn’t light it, but we tried to fight it.

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21 Yancey Ward August 10, 2017 at 1:20 am

They got greedy and should have kept the number to 40 like the other firebugs.

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22 Jay August 10, 2017 at 1:23 am

The ONLY solution is a higher minimum wage – applied to everyone!

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23 dearieme August 10, 2017 at 2:19 am

What the US needs is more immigrants from Sicily.

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24 The Engineer August 10, 2017 at 8:33 am

Uh… no. Long Island is full.

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25 Adam August 10, 2017 at 4:43 am

I know people get exited about moral hazards, but I really don’t see a way to ‘fix’ this one. I think old-fashioned policing and punishment is the right thing here, not trying to tweak the compensation structure.

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26 chuck martel August 10, 2017 at 5:55 am
27 dan1111 August 10, 2017 at 6:31 am

“regularly”? Perhaps, but that article only mentions one person who set a fire in order to make money putting it out.

Yeah, arson is a big problem, generally. But I haven’t seen evidence that this is a common motive.

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28 Harun August 10, 2017 at 1:13 pm

Wikipedia has a section about it.

100 convicted annually. Seems significant enough.

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29 rayward August 10, 2017 at 7:12 am

We see something similar every day in financial markets, as market manipulators exploit investor psychology by creating an illusion of a rising stock price. Where there’s smoke (a spike in trades) there must be fire (economic fundamentals). Those volunteer firemen would be advised to move their scheme to the financial markets, which have the distinct advantage of being opaque, unlike the market in fires.

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30 Matt August 10, 2017 at 8:14 am

1) It’s a funny sort of “volunteer” that gets paid. Do volunteer firemen in the US (not that unusual in more rural parts of the US) get paid? I don’t know, but I didn’t think so.

2) the old-school version was the combination fire department / arsonist brigade that charged money for protection. If you read and liked Anarchy, State, and Utopia, you might think of them as being part of the minimal state dominant protection agency. This version is a bit different, but not unrelated, perhaps.

3) This sort of thing isn’t unknown in the US (but I think not super common) but it usually relates to wanting to be seen as a hero or otherwise admirable for putting out the fires, rather than for the modest to non-existent pay (for volunteers). (In many parts of the US, firemen get “combat pay” premiums every time they take out the truck, and so negotiate their contracts so that they respond to all non-police 911 calls. This is why you often see fire trucks at medical emergencies even when there are no fires. (With better construction techniques, fires are fairly rare in the US now.) So, the corruption is done in a way that is safer to those involved, unless they are looking for adventure/glory rather than pay. For extra pay, it would be easier to just get random people to call in fake 911 calls of someone not breathing, etc, and then take the fire truck out, to no risk but extra pay.

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31 Willitts August 10, 2017 at 8:42 am

It’s not funny because your notion of what “volunteer” means is wrong. Volunteer has never meant “unpaid.” The word comes from the French voluntaire which means to offer oneself up for military service, as opposed to conscription.

The USAs current military is known as the All Volunteer Force, begun in the 1970s after the draft had been ended.

Granted one could say there is some equivocating going on. All fire departments nowadays are volunteer because full time professionals offer up their services.

Volunteer fire departments are on call rather than full time professionals. It’s probably more correct to follow the military terminology and call it a Reserve Fire Department.

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32 dan1111 August 10, 2017 at 9:31 am

“Volunteer has never meant ‘unpaid.'”

While the background of the word is interesting, in current usage “unpaid worker” certainly is a meaning of “volunteer”. And I’m pretty sure this is the intended sense in “volunteer firefighter”.

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33 JWatts August 10, 2017 at 11:16 am

The volunteer firefighters I know are unpaid.

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34 Roy LC August 10, 2017 at 11:21 am

In most areas with volunteer fire departments they are payed for the period they are fighting fires and their are considerable perks for being in the company.

Official volunteers for forest and brush fires are always paid for periods when they are fighting fires.

In my area a lot of young men and not a few young women treat fire season as a summer job, and my own state tries, but is often unable to release college students as classes start. Considering how long they can spend in the field and the strenous nature of the work it would be impossible to not pay them.

In addition I don’t know a professor or instructor at any of our local colleges that won’t take considerable time to personally help fire fighting students catch up.

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35 Anonymous Coward August 10, 2017 at 8:12 pm

> And I’m pretty sure this is the intended sense in “volunteer firefighter”.

It’s also the only way for the term to be meaningful unless firefighters are being conscripted.

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36 Thiago Ribeiro August 10, 2017 at 8:42 am

I would never imagine there is corruption in Sicily. I am shocked, shocked.

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37 Brasileiro August 10, 2017 at 9:36 am

Yes, i would add that i never saw any corruption in Brazil ever.

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38 Thiago Ribeiro August 10, 2017 at 9:49 am

Rhere may be some corruption going on sometimes, but the culprits are punished as they must be.

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39 A B August 10, 2017 at 10:04 am

The best example of ‘Systems growing to oppose their own function’ was when members of the Innocence Project framed a man for murder to secure the release of another:

http://archive.jsonline.com/news/milwaukee/duped-by-innocence-project-milwaukee-man-now-free-b99386015z1-281852841.html/

http://www.thedailybeast.com/the-innocence-project-may-have-framed-a-man-for-a-crime-he-didnt-commit

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40 Thiago Ribeiro August 10, 2017 at 11:55 am

So what? Afterwards they can frame another person to secure the originally framed guy’s release.

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41 Anonymous Coward August 10, 2017 at 8:13 pm
42 TR5749 August 10, 2017 at 1:01 pm

my dad grew up in a small village in what is now the Rust Belt. There was a single factory in town that employed most of the adult male population. The village fire department was made up entirely of volunteers. My dad told me of how, when he was a teenager, some of the men would pay him & his friends (usually with some beer) to set small grass fires on the outskirts of town so that they could get out of work.

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43 Donald J. Trump August 10, 2017 at 1:24 pm

MAGA!

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44 JosieB August 11, 2017 at 1:11 am

Don’t want to sound like a scold, but community values are attenuated even in homogeneous locales. People need reasons — religion, philosophy, public shaming, whatever you like — to care about the welfare of others outside their immediate family.

Law enforcement can punish the worst offenses, sometimes, but it’s a weak motivator. And increasingly, the ethic that “if it’s not against the law, it’s perfectly fine” rings hollow.

The system is fraying bigly.

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