A Hole in the Market

“When markets fail, use markets.”

The above is a quote from Arnold Kling, the person who started this blog. I thought of that when reading Sally Satel, “Rethink Crisis Response,” Reason, October 2020. The whole October issue, by the way, is focused on fixing the police, and it’s excellent.

Here are the first 3 paragraphs from Satel’s article.

“Please just send one police car, please don’t have your weapons drawn, please take him to the hospital.” These are the words that many families with a mentally ill loved one have learned to say when crisis strikes. Sabah Muhammad and her siblings have spoken them several times since 2007, the year her brother was diagnosed with paranoid schizophrenia. He had been a standout student and star running back at his high school near Atlanta, but everything changed around his 18th birthday. “He would become catatonic, barely moving, just staring into space,” Sabah explains. “Sometimes he locked himself in his room for weeks, refusing food, except to come out of his room at 3 a.m. to make toast that he blackened to carbon ‘to get the poison out.’”

Mute and malnourished, he would not allow family to take him to a psychiatrist—but he desperately needed help. The only option in the Muhammads’ Atlanta jurisdiction was a 911 call to report a psychiatric emergency, which tended to bring the police, multiple squad cars with lights flashing, and the ominous specter of armed agents encountering a young black man in a delusional state. So Sabah and her family would call the police, and pray.

The data justify their dread. Between 25 and 50 percent of all people killed annually by police are in the midst of a mental health crisis when they’re slain, according to a report by the Treatment Advocacy Center (TAC), a Virginia-based nonprofit dedicated to improving treatment for people with serious mental illnesses.

Satel goes on to discuss why there should be other models: why it would make sense to call emergency responders who are skilled at dealing with people who have mental health problems.

I agree. Implicit, though, in her article seems to be the idea that the emergency responder should be a government official. But why? Even economists with more trust in government than I have tend to think that governments should provide public goods. But when someone has mental health problems, treating that person is a private good. The treatment is rival in consumption (the resources to treat one person can’t be used to treat another person at the exact same time) and excludable (it’s easy to withhold the service from someone who doesn’t pay.

It’s true that such private provision does not seem to exist now. My guess is that that’s due in large part to the fact that we are so used to calling 911 in an emergency and to the fact that the government doesn’t charge for the service. But if people, as Satel writes, “dread” having the government come with guns, people might not think that service that they pay zero on the margin for is so great.

That’s where Arnold Kling’s line comes in. Private provision doesn’t exist; start providing privately.