The Logic of Collective Action: Public Goods and the Theory of Groups (Harvard Economic Studies, Volume 124)
Mancur Olson Jr.
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This book develops an original theory of group and organizational behavior that cuts across disciplinary lines and illustrates the theory with empirical and historical studies of particular organizations. Applying economic analysis to the subjects of the political scientist, sociologist, and economist, Mancur Olson examines the extent to which the individuals that share a common interest find it in their individual interest to bear the costs of the organizational effort.
The theory shows that most organizations produce what the economist calls “public goods”—goods or services that are available to every member, whether or not he has borne any of the costs of providing them. Economists have long understood that defense, law and order were public goods that could not be marketed to individuals, and that taxation was necessary. They have not, however, taken account of the fact that private as well as governmental organizations produce public goods.
The services the labor union provides for the worker it represents, or the benefits a lobby obtains for the group it represents, are public goods: they automatically go to every individual in the group, whether or not he helped bear the costs. It follows that, just as governments require compulsory taxation, many large private organizations require special (and sometimes coercive) devices to obtain the resources they need.
This is not true of smaller organizations for, as this book shows, small and large organizations support themselves in entirely different ways. The theory indicates that, though small groups can act to further their interest much more easily than large ones, they will tend to devote too few resources to the satisfaction of their common interests, and that there is a surprising tendency for the “lesser” members of the small group to exploit the “greater” members by making them bear a disproportionate share of the burden of any group action.
All of the theory in the book is in Chapter 1; the remaining chapters contain empirical and historical evidence of the theory’s relevance to labor unions, pressure groups, corporations, and Marxian class action.
is easy for them to know each other's mind; and each must perceive, that the immediate consequence of his failing in his part, is the abandoning of the whole project. But it is very difficult, and indeed impossible, that a thousand persons should agree in any such action; it being difficult for them to concert so complicated a design, and still more difficult for them to execute it; while each seeks a pretext to free himself of the trouble and expense, and would lay the whole burden on others.
there is no incentive for any individual in a latent group to join such an association. I3 However important a function may be, there is no presumption that a latent group will be able to organize and act to perform this function. Small primary groups by contrast presumably can act to perform functions that are beneficial to them. The traditional theory 13. There is no suggestion here, of course, that all groups are necessarily explained in terms of monetary or material interests. The argument
traditionally provided by government inevitably entails a limitation of economic freedom, while the government-owned socialistic enterprise producing noncollective good does not necessarily entail any such loss of freedom. It is therefore possible that the widespread belief that the growth of the governmental sector is equivalent to a decline in economic freedom owes something to the association of all governmental activity wtih the traditional governmental services, and particularly with the
Republicans usually treat the labor unions as the major source of enemy strength. The membership of the AFL-CIO is several times larger than the membership of any other lobbying organization. The labor unions have, moreover, an impressive organizational network to match their numbers: there are about 60,000 to 70,000 union locals in this country.5 Labor leaders have claimed that they could influence about 25 million voters. 6 Their purely political expenditures are measured in the millions. 7 In
William, 56 Metropolitan areas, 36 Michels, Robert, 10 Michigan, 135, 140 Mill, John Stuart, 68, 102 Millis, Harry A., 80 Mills, C. Wright, 104, 105 "Mobilized" group, 51, 133-134 Monopolistic competition. S~~ Competition and Oligopoly and Monopoly Monopoly, 49, 133, 144, 166. See also Oligopoly and Competition Montemartini, Giovanni, 102 Moore, Arthur, 154 Morgan, J. Pierpont, 114 Morgenstern, Oskar, 5 Mosca, Gaetano, 17 183 Mowat, Charles, 137 Mundt Resolution. 139 Musgrave, Richard, vii, 14,