If fireproofing is a waste for the poor, it is also a waste for the rich

Megan McArdle has this piece about the London fire in which she argues that it could be that installing sprinklers and other fireproofing will actually kill more people than it saves:

If it costs more to build buildings, then rents will rise. People will be forced to live in smaller spaces, perhaps farther away. Some of them, in fact, may be forced to commute by automobile, and then die in a car accident. We don’t see those costs in the same way as we see a fire’s victims; we will never know the name of the guy who was killed in a car accident because he had to live far from work because rents rose because regulators required sprinkler systems. But that is a distinction for public opinion, not for good policy making. Good regulations would take into account the proximate and distant effects.

She is careful to say she has no idea if this is actually true in this scenario, but nonetheless feels like we need to consider this possibility.

So let us actually consider this possibility and tease out its full implications, not only as it pertains to the housing of the poor, but also as it pertains to the housing of the rich.

McArdle argues that fireproofing will increase unit building costs and the negative effect this has is that people have to live farther away and commute for longer periods of time. But if this is true, then it is true of fireproofing in general. The Kensington mansions that have substantial fireproofing also have the exact same detrimental effect on rents. And so if it can be determined that those effects are so negative that fireproofing is net harmful, then fireproofing should be banned. Allowing an owner of a Kensington mansion to fireproof their home is to allow the owner to literally kill other people.

Indeed, if you are worried about the higher rents caused by fireproofing, you should also be worried about the higher rents caused by high-end amenities in general. Ban granite countertops. Ban exposed brick. Ban everything else that about a housing unit that gets rich people excited enough to pay higher rents. You can live with a laminate countertop. Others literally will not live if you install a granite one.

McArdle then goes on to argue that, separate from the issue of rents, the resources that go into fireproofing could be dedicated towards other things. But once again, this argument is equally applicable to the fireproofing carried out by rich people. If it is a waste to use some of the country’s scarce work hours and scarce raw materials to put a sprinkler system into a public housing complex, then it is just as much of a waste to use those same hours and materials to put the system into a private housing complex. The wastefulness of a particular unit of production does not change just because the income of its consumer is higher.

As David Lammy noted: “If you want to build these buildings, then let them at least be as good as the luxury penthouses that are also being built.” The equivalence between the two with respect to fireproofing is key here. If you think the fireproofing is worth it, then it should be available across the board. If not, then it should be unavailable across the board. This is especially true if you believe, as McArdle does, that the installation of fireproofing has negative externalities because of its effects on rents. It is (arguably) one thing to hurt yourself by wastefully fireproofing; it is another to kill other people by doing so.

Despite the fact that her argument clearly points in the direction of a universal rule on fireproofing (whether yay or nay), that is unsurprisingly not where McArdle ultimately winds up.

People can make their own assessments of the risks, and the price they’re willing to pay to allay them, rather than substituting the judgment of some politician or bureaucrat who will not receive the benefit or pay the cost.

After just saying that unnecessary fireproofing will kill other human beings, McArdle bizarrely reaches the conclusion that individuals should be able to decide on their own whether to do it (i.e. whether to kill other human beings). Even though there is nothing in her argument that supports the idea that fireproofing might be a wise way to allocate resources for the dwellings of the rich but not a wise way to allocate them for the dwellings of the poor, the upshot of her ultimate policy preference is precisely that: the rich will generally be safe from fire, but the poor will not.

  • Phil Perspective

    Who hired at McArgleBargle at Bloomberg? Are they not embarrassed enough yet?

  • Yeah, I didn’t know you only needed a high schooler’s understanding of economics to write for them.

  • Who’s actuarial tables do YOU use?

  • neroden

    McMegan is a great example of “failing upward” and “wingnut welfare”.

  • TheBrett

    Someone should have told McArdle that there would be a pretty bad reaction to her making an argument about acceptable trade-offs for safety and the statistical value of human safety literally days after this happened. This is like when Matt Yglesias decided right after the Rana Plaza factory collapse in Bangladesh to pose a “just suggesting a hypothetical” essay arguing that countries ought to set their own acceptable level of risk, and poorer countries might take more.

  • Yeah Yglesias is usually pretty good but that was quite the head scratcher.

  • johnshaplin

    She doesn’t consider the different insurance costs and liabilities associated with buildings arrayed with sprinklers, fire-resistant siding, , effective alarm system and exits compared with those which are not. Nor the costs of systems of emergency response necessarily associated with the two kinds of structures. Nor the political price to be paid as a consequence in the case of one as opposed to the other in the event of a fire. Sufficient to say, the very office building in which she is employed is undoubtedly fitted with all those devices and systems which protect both her employer and the city in matters of cost and lives as a matter of long-standing law the existence of which is not and will never be up for debate.

  • LutherZBlissett

    Is it ad hominem to note that Ms McArdle is the daughter of a former Commissioner of the New York City Department of Environmental Protection and MD of the General Contractors Association of New York?

    Perhaps it is, but I certainly know more about the jobs done by my parents than about the jobs they didn’t do.

  • Phil Millspaw

    *coughs* *sticks index finger into the air*

    Megan McShartle.

  • Q___P

    As a landlord wanting to crank up my rents perhaps I should fit more granite countertops and marble bathrooms, I’m sure my tenants will rush out and get better paid jobs to fund them.

  • Ellis_Weiner

    It’s worse than that. People who drive to work “may” be killed in car accidents, yes. But people who walk to work may be killed by falling pianos. People who take public transit to work may be killed by terrorist bombs. People who work at home may be killed by faulty wiring or carbon monoxide leaks. The conclusion is simple: Either there should be no laws regarding public safety–since every restriction impels people to select a different, equally lethal option–or no one should work.

  • Joseph Gauger

    “the judgment of some politician or bureaucrat who will not receive the benefit or pay the cost.”

    Since the general population meets the externalized costs of safety measures, how could a politician or bureaucrat not pay the cost of their own decision? Do pencil-pushing civil servants make enough money that increasing rents will never price them out of central London? Even so, McArdle’s argument postulates that they would at least be paying more in rent.

    How could she possibly exclude policy-makers from paying more? They consume housing the same as anyone else. The only real work she’s doing here is undermining the market-libertarian talking point about how unelected bureaucrats don’t pay the cost of their inefficient regulations.

  • Wojtek Sokolowski

    Apparently McArdle skipped the econ class when they were covering public goods and why markets fail to deliver them. Public safety is a textbook example of such goods.

  • FarTooReasonable

    Megan McGriddle

  • The residents of the Oakland ‘Ghost Ship’ warehouse may have had to pay higher rents had the landlord installed sprinklers (or maybe brought anything up to code) but at east the 36 people who died could have made the choice for higher rent or a longer commute?

  • reason60

    As an architect, libertarian posts on building regulations always catch my eye, and always leave them rolling to the point of pain.
    Modern building codes were first promulgated in the late 19th century by capitalist insurance companies and greedy real estate developers who were tired of the staggering losses that the frequent catastrophic fires wreaked on urban environments.

    Disasters like Grenfell and Rana Plaza are virtually unknown in the modern first world cities, which (not coincidentally!) makes cities like New York and San Francisco magnets for investment.

    If you are plunking down a few hundred million on a building, its nice to know it isn’t going to collapse into a pile of smoldering embers at any moment, either from its own shortcomings or the ones of the neighbor.

    How many people here would put their retirement accounts into Rana Plaza Phase II?

  • marji80

    Megan McArdle is the worst.

  • 1. There’s no such thing as fireproofing.
    2. Oh look, we have all these protective measures in place! No need to behave responsibly proactive anymore!
    SEE: (ie)The Dole. “free” health care, gun free zones, thalidomide, asbestos siding, alternating current!

  • Melanie Heisey

    Omfg has no one explained to this person what marginal value and diminishing returns of money are? MONETARY TRADEOFFS LOOK DIFFERENT BASED ON WHETHER THEY’RE BASED ON YOUR FIRST DOLLAR OR YOUR BILLIONTH.

    Is fireproofing worth its cost? Sure it is! Lots of things are more valuable than they are priced at. But—get this—poor people don’t have infinite money to spend on valuable things. They might have to focus on the MOST valuable ones or something.

  • Uptown Quiet

    Thank you for writing this! My blood absolutely boiled when I read McArdle’s piece. She argues the market should choose but for most people in public housing, their options are severely limited, so they generally have to accept things as they are, even if they’re unsafe. Her argument to preserve that is ludicrous.

  • Unhiddenness

    The question that should be asked of McArdle is: Would you have written this piece if this had occurred in a building that contained only luxury apartments, owned by high net worth individuals?

    I think it’s fairly obvious that it would not have been.

  • Konrad_Lorenz

    Isn’t the fatal flaw in your argument that you assume the lives of the poor are equally valuable to the lives of the wealthy?