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The Logic of Collective Action: Public Goods and the Theory of Groups, With a New Preface and Appendix (Harvard Economic Studies) Paperback – January 1, 1971
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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.
- Print length186 pages
- LanguageEnglish
- PublisherHarvard University Press
- Publication dateJanuary 1, 1971
- Dimensions5.5 x 0.54 x 8.25 inches
- ISBN-100674537513
- ISBN-13978-0674537514
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Editorial Reviews
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“Olson’s book is a significant and valuable contribution to the economist’s attempt to come to grips with organizational problems.”―Neil W. Chamberlain, American Economic Review
“This superb little volume is worthy of the attention of all social scientists. It can lead to a healthy and challenging discussion and perhaps to a reappraisal of pressure groups in American society.”―Public Opinion Quarterly
“There is now a considerable body of literature which attempts to apply economic analysis to political problems. In my opinion, Olson’s is one of the most successful and provocative of these attempts. Olson’s central insight is novel and illuminating to political scientists and he shows that by the use of it he can give familiar facts (about labor unions, farm organizations, and other interest groups) new meaning. I believe that his work is going to force the jettisoning of much of what has been said about interest groups and the revision of the rest. It should also have an influence on the many political scientists who work in the field of organization.”―Edward C. Banfield, Henry Lee Shattuck Professor of Urban Government, Harvard University
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Product details
- Publisher : Harvard University Press; Revised edition (January 1, 1971)
- Language : English
- Paperback : 186 pages
- ISBN-10 : 0674537513
- ISBN-13 : 978-0674537514
- Item Weight : 8.8 ounces
- Dimensions : 5.5 x 0.54 x 8.25 inches
- Best Sellers Rank: #428,384 in Books (See Top 100 in Books)
- #4,360 in Economics (Books)
- #4,933 in Sociology (Books)
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1) Critique of Marx (Ch. 4, primarily) Marxism *does not* come about through a class of people overthrowing bourgeois values. In practice, Marxism only happens when a tiny faction commits violence under (and against) a weak government. Marx is emotional, not rational; that emotion is ENVY (108). Marx is utopian and his “Theory of Everything” is just as riddled with holes as any other “Theory of Everything,” except more so, because Marx misunderstands both human nature and prices. Lethal for an economist.
2) Externalities (Appendix A and pp 48-49, 161) When common goods benefit only a minority within a jurisdiction, the goods will be provded (if at all) only to a less than optimal degree (171). The discussion of “political entrepreneurs” who bluster instead of bargaining is prescient (176).
This is my third time through this book (1992 and 1997 were the others) and it is interesting to see Olson’s theories hold up through different political/social cycles. The book was written in 1965, the Appendix in 1971. I could spend a week reading and thinking about just the footnotes in this book. Excellent analysis and cogent writing. Recommend!
Read also:
William J. Baumol “Welfare Economics” p. 98
Joseph Schumpeter “Capitalism, Socialism and Democracy” p. 109
Olson's theory is applied to labor unions, corporations, and other pressure groups. Olson also has a critique of Marxian class theory which drives one more nail into the coffin of communism. The Logic of Collective Action is important because it explains so much about how real groups have functioned throughout history. Pressure groups date back to the ancient world, and Olson's theory fits very well with this experience.
Olson's ideas need further dissemination because most people get the special interest issue wrong. Most people recognize that pressure groups are often pernicious. But all too many people think that undue special interest influence is just a current phase that can be dealt with in a simple manner. This book indicates that we really should reconsider the role of government in society, especially at the Federal level. Olson is certainly not an anarchist, he insists that there are some things that government can and should do. However, the inevitability of special interest influence does make it impossible for government to function as many would like it too. Read this book along with Gordon Tullock's The Politics of Bureaucracy. Olson and Tullock enable us to make greater sense of world history.
However, it is a great introduction to collective action, as the basic argument has not changed: groups in which the benefits from collective goods cannot be denied to people are very difficult to organize. Organization will more lilkey come about when there is one (or a small number of) individual whose cost of action is lower than his own expected benefits; this leads to an exploitation by the small of the large, which is an interesting and counterintutive situation.
Olson provides a wide array of examples, which are of course old but nonetheless relevant. Examples include farming organizations, trade unions, business pressure groups, medical associations, etc. Overall, I found this book to be very interesting and easy to read, as the economics hardly ever go beyond basic math. For people who like rational arguments, it will be a pleasure to read this. The most interesting portion of the book, in my opinion, is the author's argument why Marxism does not work in practice in the way that Marx predicted.
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