The Logic Of Collective Action: Public Goods And The Theory Of Groups

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 individuals sharing a common interest find it in their individual interest to bear the costs of organizational effort.

The theory shows that most organizations produce what economists call "public goods"—goods or services available to every member, whether or not they have borne any of the costs of providing them. Defense, law, and order are classic public goods that cannot be marketed to individuals, requiring taxation. Private organizations also produce public goods, such as labor union services or group lobbying benefits, which automatically go to all members regardless of individual contribution. Large organizations often require coercive devices to obtain necessary resources, unlike smaller groups which support themselves differently.

The theory indicates that, while small groups can more easily act in their interest, they tend to allocate too few resources to satisfy their common interests and may exploit the "greater" members by placing disproportionate burdens on them. The remaining chapters provide empirical and historical evidence of the theory's relevance to labor unions, pressure groups, corporations, and Marxian class action.