The Logic of Collective Action: Public Goods and the Theory of Groups, Second printing with new preface and appendix (Harvard Economic Studies)

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, Mr. 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.

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.


A Genuine Classic that Urgently Demands New Attention   August 6, 2007
Anonymous Reader (United States)
4 out of 4 found this review helpful

I initially read Mancur Olson's The Logic of Collective Action over 30 years ago, and have found it to be a seminal work of economic scholarship that resonates over the decades. This masterpiece is in urgent need of new attention, especially as America confronts its role in a post September 11 society.

Olson's theory is deceptively simple: goods that are primarily public (everything from a town park to a cruise missile) suffer from a "free rider" problem, in that most of those who would benefit from their provision are not personally motivated to pay for them. Thus, collective action, undertaken through the political sphere, is needed to provide goods and services intended for the collective welfare.

"The Logic of Collective Action" is based on economic theory. Olson's theory recognizes that competitive markets are the best source of private goods, but draws an articulate and compelling case for the intervention of government to provide those goods and services that are beneficial for society, but which cannot be offered effectively through market mechanisms.

A re-reading of this concise and well-written volume is urgently needed in 2007 America. For close to three decades, the downsizing of government has been the dominant theme in U.S. political life. Some of this trimming may well have been appropriate, but events of recent years (September 11, the Katrina hurricane, the possibility of adverse climate change) suggest that collective action is needed to address the most pressing problems of our time.

Olson's gem of a book is a worthwhile place to start our national reconsideration of the logic of collective action.



How to Explain History   April 18, 2008
D. W. MacKenzie (New London CT)
4 out of 4 found this review helpful

Many people discuss the influence of groups, but few really understand why some groups have are more effective than others. Mancur Olson crafted subtle and persuasive arguments explaining why special interest groups are often so effective. People participate in groups according to the expected marginal costs and benefits. Problems with group action emerge when we consider externalities and public goods provision within groups.

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.


THE crucial book on political economy   August 11, 2000
J. Michael Showalter (Nashville, TN United States)
18 out of 25 found this review helpful

I once read that Olson was on the short list of people being considered for the Nobel Prize at the time of his death. Certainly, this list is not so short: at least three of my college professors were rumored to be.... Enough of that, though....

This work takes a simple premise and expands on it to explain processes that at the outset seem contradictory. Organisations exist, in economic logic, to seek either economic rent or ideological satisfaction. Olson in this book works through organisational logic and explains group behavior in a clear, concise fashion. This behavior influences economic performance and politics at all levels.

Moreso than other books which in part relate to the same areas (including Olson's the Rise and Decline of Nations and a few by Douglass North) this is THE key text for this issue, and a must read for anyone who is into political economy.


Insightful look at political stability and the economy   June 19, 1999
10 out of 14 found this review helpful

Olson uses economic rationality to explain the creation of stable social/political organizations. He offers a facinating glimpse at the full relationship between politics and economics through the lens of the self-interested, roving bandit.