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Abstract
The logic of collective action undermines the assumption that common interests are always promoted by their beneficiaries. Where the number of beneficiaries is large, the benefits of collective action are a public good: beneficiaries will gain whether or not they participate in promoting them, while their individual efforts cannot secure them. Small groups can use selective incentives to ensure that their members contribute to promoting their common interests. This typically results in the paradoxical ‘exploitation of the great by the small’. The logic of collective action helps explain many notable examples of economic growth and stagnation since the Middle Ages.KeywordsAnarchyBargainingCartelsClass conflictCollective actionCollective bargainingCollusionCommon interestsCountervailing powerEncompassing organizationsExcess burdenExploitationGalbraith, K.Group theoryIndustrial revolutionInvisible handLatent groupsLobbyingMercantilismNon-excludabilityOlson, M.Patronage dividendsPublic choicePublic goodsRevelation of preferencesSamuelson, P.Selective incentivesSmith, A.Strategic behaviourTechnical progressTrade unionsWicksell, J.JEL ClassificationsD71
Published Version
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