The Logic of Collective Action: The Fall of an Iconic Theory?

Was Mancur Olson wrong?  That is the question posed by an essayist at an unlikely website, the American Enterprise Institute.  You wouldn’t think that a conservative American think tank would wish to entertain this possibility because Olson’s The Logic of Collective Action has been a revered touchstone for free-market champions since its publication in 1965.  It's been rivaled only by similar arguments that Garrett Hardin made in his famous “tragedy of the commons" parable three years later.

Both Olson and Hardin proposed memorable theories for why it is difficult for groups of people to undertake collective action.  But recently, on the AEI website, Brookings Institution scholar Jonathan Rauch seriously considers the possibility that Olson’s analysis is wrong, or at least has been rendered weak by history.  The occasion for this reflection is the publication of a new book, Strength in Numbers:  The Political Power of Weak Interests, by Gunnar Trumbull, a Harvard business professor.

First, a quick review of Olson, who in the 1960s was an economist at the University of Maryland.  Olson pointed to the great effort that it takes to organize people with diffuse interests.  It’s hard for them to find each other, come together, and then organize themselves to advance their collective interests.  The “logic of collective action,” as Olson put it, is that individuals are so fragmented and diverse that it is difficult for their collective interests to be represented in the public policymaking.  That’s why it’s so darn hard for citizens to prevail against corporate lobbies, who tend to have the advantage in securing government favors, subsidies, legal entitlements, etc. 

Olson took the economic premises of the “tragedy of the commons” (individuals cannot overcome their narrow self-interest) to the world of politics and policymaking.  Not only is it difficult for individuals to organize themselves to manage resources for shared benefit (leading to the tragedy of the commons), it is difficult for them to express their interests through government (because concentrated, well-organized political interests can easily impose their narrow political priorities). 

The implied answer to these dilemmas, of course, is a greater reliance on private property and “free markets.” 

The Olson analysis is part of the “public choice” school of thought about the political economy that holds that “rational citizens” have insufficient incentives to become informed citizens and to vote.  As Wikipedia puts it, “the rational decision for each voter is to be generally ignorant of politics and perhaps even abstain from voting.  Rational choice theorists claim that this explains the gross ignorance of most citizens in modern democracies as well as low voter turnout.” 

Rauch explains the political significance of Olson’s theory for his times:   

[Olson’s Logic of Collective Action] blew a hole in the hull of American political science’s leading postwar theory, pluralism, which saw transactional interest-group politics as basically fair and functional so long as everyone was at the bargaining table. Wrong, said public choice:  the table is tilted. Unusually, the public-choice analysis found support from both ends of the political spectrum. Liberals embraced the idea that the system was biased toward the concentrated power of corporations; conservatives embraced the idea that political decision making is inherently unfair. Down went pluralism.

But author Gunnar Trumbull takes apart the venerable Olson thesis.  The reviewer Rauch summarizes the reasons:

In fact, weak, diffuse groups have a paradoxical political advantage: precisely because they are weak and diffuse, the public sees them as less self-interested and thus comparatively trustworthy. Second, Olson also underestimates the power of ideological motivation, rather than just money and concentration, to spur activism. Third, “diffuse interests can be represented without mobilization,” thanks to activism by politicians and government officials who take up their cause. (FDR started a federal pension program at a time when “retirees,” as a self-identified social class, did not yet exist. The program created the constituency, rather than the other way around.) Fourth, weak or diffuse interests can link up with concentrated groups to amplify their effectiveness, as when consumers align with exporters to oppose trade protections or when free-speech advocates join with political parties to oppose campaign-finance limits.

In our times, there is an even more compelling reason for concluding that Olson’s analysis is wrong.  The rise of the World Wide Web since 1994 -- and since then social networking, wikis, and countless other innovations -- has made it ridiculously easy for people to find each other and organize to publicly advance their shared interests.  That’s one reason that the commons is so robust today – the coordination and communication barriers among people have virtually disappeared in online spaces.  

Rauch’s review of Strength in Numbers takes on more subtleties and counterarguments than I’ve recounted here, so it’s worth reading the full review.  But one lesson that emerges for me is this:  now that collective action is so empowered by digital platforms, it’s time for government policymaking to start to take account of this development and make better use of it in its own governance.  They could start by recognizing the very idea of the commons as a useful, socially resilient and politically legitimate vehicle for achieving important work.  If government can charter financial mafias known as banks and corporations, ostensibly to advance the public interest, why not the commons?