The Logic of Collective Action: Public Goods and the Theory of Groups, Second printing with new preface and appendix by Mancur Olson Jr.

Logic of Collective Action: Public Goods and the Theory of Groups, Second printing with new prefaceby Anonymous

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September 22, 2001: Cost/Benefit When we look at cases of organizations like labor union, pressure group or firm, Even if members share the common interest, it doesn't guarantee they will act on that interest. To achieve the purpose, one should pay the cost. But 'a goal or purpose is common to a group means that no one in the group is excluded from the benefit or satisfaction brought about by it achievement.' So if one could get the benefit without cost, he would let others bear the burden. Public Good/Taxing: Everybody's business is nobody's business let's take example. The state provides public good like the defense, police protection, law system, which 'must be available to everyone if they are available to anyone'. It can't be free to provide those services. The burden is charged as tax. But tax evasion is as old as human history. It's the reason why the tax has been defined as 'compulsory payment'. Likewise 'collective good' of organizations cause the same free rider problem. Size matters: Individual acts on the function of cost and benefit: The lower cost to get the collective good, the more willing to bear the cost. The smaller is the size of group, the larger is the share of collective good one gets in relation to total cost. Even though only one member with greatest interest pays all the cost, he will do so as long as benefit exceeds cost. This kind of group can provide collective good without relying on coercion or incentive apart from the collective good itself. But without arranging the share of burden (group-oriented act), the amount of collective good can't be optimized (exploitation). 'Accordingly, the larger the group, the farther it will fall short of providing an optimal amount of a collective good.' Moreover, the larger is the group, the less likely noticeable is the effect of individual's contribution. So here the leviathan comes in: Coercion and incentive. Once there is the formal organizing, the larger the better, for it leads to lower cost to each. But organizing itself should be obtained at cost. 'These are the costs of 'communication among group members, the costs of any bargaining among them, and the costs of creating, staffing, and maintaining any formal group organization.' These costs put on the total cost of getting collective good. And it makes the supply of collective not optimized. This reinforces the need of coercion/incentive. Inclusive/Exclusive Group: If the nature of collective good is fixed (scarce) in supply, members doesn't resist to newcomers. In this case, members become competitor or rival to each other, for the availability of collective good is exclusive to each member. 'The firms in an industry would be an exclusive group when they sought a higher price in their industry by restricting output.' Here the monopoly is the ideal to participant. But in nonmarket situation, the opposite is true, for collective good is not fixed in supply. In other word, it's inclusive. In such a case, if permitted, the group tends to expand upto the point that benefit equals cost. When seeking lower taxes, or tariff, firms would make 'an inclusive group, and would enlist all the support they could get. Privileged/Intermediate/latent Group: Privileged group refers to the small group providing collective good for sure without organizing or coordinating. Intermediate group refers to the small group where nobody gets the benefit sufficient to motivate him to provide the good himself but it's not big enough to demotivate...