Thursday, June 22, 2017

Back to McArdle

I see Megan McArdle's "let's not blame governments for the Grenfell fire - they were just acting as libertarians like them to act " column at Bloomberg has now reached nearly 2000 comments, with probably 95% of them ridiculing her.

As I noted in my previous post, it was pretty disingenuous of her to concentrate only on the issue of the cost of retrofitting fire sprinklers, when the more obvious problem was regulations regarding the cladding.   Does she really have to be reminded that if the cladding didn't burn, the entire building might not have gone up and the issue of sprinklers could have been much less important?

In any event, even her argument about sprinklers is looking shaky for two reasons:

a.   it is starting to look like the cost of retrofitting them is actually not as high as I would have guessed:
The British Automatic Fire Sprinkler Association (BAFSA), the trade body for the fire sprinkler industry, said retrofitting Grenfell Tower with sprinklers might have cost £200,000. This is the figure for installing a sprinkler system but does not include potential maintenance fees or costs associated with the wider redevelopment of a building.
And another Council has already decided to retrofit 25 high rise blocks at a cost of ten million pounds.

b.   McArdle's argument - that every dollar governments spend on sprinklers would divert it from other life preserving things like hospitals - conveniently, and in a very libertarian/small government way, ignores government's ability to raise extra money for worthwhile things by raising extra taxes.  Oh noes - we can't have that.

Now, this is not to deny that there might still be a legitimate argument to be had, by appropriate experts, about cost benefit analysis of retrofitting sprinklers to certain buildings.  

But clearly, McArdle's position was to start from a presumption not only that it's always best to leave it to the market to decide (a silly thing to be talking about when these residents did not have market power - and also, to the extent that you could say the market, in the sense of builders quoting for a job, came up with a disastrous result on the cladding in this case); but that you should never be too tough on government for making decisions on a cost benefit basis, even when there is no evidence around that cost benefit was considered in this case.   (And, that in fact, money saved on public housing and other Council functions was given back to the well off in the Council!)


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