The Logic of Collective Action: Public Goods and the Theory of Groups is a book by Mancur Olson , first published in 1965 . It develops a theory in political economy that is about concentrating benefits against diffuse costs. The book challenged two prevailing notions:
- if all members of a group have common interests or goals, then they will act together to achieve them
- in a democracy, the biggest problem is that the majority exploits the minority
The Logic of Collective Action argues that individuals in all groups who try to act collectively have motives to become free passengers at the expense of others, if the group tries to create common benefits . The only exception to this is groups that only reward those who actively participate in the joint work. Common benefits are goods that, firstly, cannot be excluded; that is, an individual cannot prevent others from taking part in the product. In addition, such goods are non-rival; that is, an individual's consumption of the product does not affect others' opportunities for consumption of the same product. As a result of these free passengers become collective actionunlikely even in large groups of people with common interests. In any case, if there are no selective incentives to motivate individuals.
Olson also describes how large groups face relatively high costs when trying to organize for collective action, while smaller groups face relatively low costs. Individuals in large groups have relatively little to gain per person from successful joint action. At the same time, individuals in small groups have relatively much to gain per person. The consequence of this is that the incentives for collective action decrease while the group grows in size. Larger groups find it more difficult to act in their common interest compared to smaller groups.
The Logic of Collective Action discusses several examples of organizational situations where problems with collective action are difficult to overcome. One such situation is trade unions. Olson also mentions the relation of his theory to certain Marxist theory which comes to similar conclusions, but which Olson nevertheless dismisses.
The Logic of Collective Action concludes with the conclusion that situations may arise where minority groups - where all participants have much to gain per individual - will dominate or exploit the majority.
