FIGHTING FIRE WITH FIRE

 

IT WAS the Great Fire of 1666 that prompted the establishment of London’s modern fire brigade, organised at first by private insurers, but later coming under public management. In Paris, on the initiative of Louis XV, the pompiers have been fighting fires since 1733. Few Europeans today could imagine a city without a public firefighting service, or a home without fire insurance. But when the architects of the single currency built the euro, they thought that sharing the risk of disaster might merely encourage recklessness and even arson. Better than this moral hazard was to make each country master of its own fate. Why should those living in brick houses save the feckless in their wooden huts? THE ECONOMIST

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