1 - Collective action

Summary

Introduction

The problem of collective action, also referred to as the problem of free riding or the problem of voluntary provision of public goods, is deep and pervasive. The rational self-interest of individuals may lead them to behave in ways that are collectively disastrous. To get out of this predicament, people may abdicate their power to the state, Hobbes's Leviathan. They may also, however, achieve cooperation by decentralized, uncoerced means. This is the main topic of the present chapter. Decentralized solutions are more fundamental than centralized ones, since compliance with central directives is itself a collective action problem. In this chapter, I state the structure of the collective action problem and discuss how people might rationally want to cooperate rather than take a free ride on others. The analysis is incomplete, since nonrational motives also enter powerfully into the decision to cooperate. These are discussed in Chapter 5.

To motivate the discussion, I begin with a few examples of collective action problems. The formation of a trade union or a price cartel is a collective action problem for the potential members: all benefit if all join, but each benefits more by abstaining. Nonmembers can benefit from wage increases negotiated by the union. Defectors from a cartel can corner the market. Voting presents a problem of collective action in several respects. Those who vote mainly to elect a given candidate face the problem that unless most of the candidate's supporters vote he will lose, whereas any single vote makes literally no difference except in the unlikely event that it is pivotal.