THE LOGIC OF

COLLECTIVE ACTION
Public Goods
and the
Theory of Groups

MANCUR OLSON

Harvard University Press

Cambridge Massachusetts
London England

Introduction
It is .;>ften taken forgranted, at kast where eeonomi objectives are
involved, that groups of individuals with o:>mmon interests usually
attempt to further those o:>mmon interests. Groups of individuals
with common interests are expected to act on behalf of their common.
interests much as single individuals are often expected to act on
behalf of their personal interests. This opinion about group behavior
is frequently found not only in popular discussions but also in
scholarly writings. Many economists of diverse methodological and
ideological traditions have implicitly or explicitly accepted it. This
view has, for example, been important in many theories- of labor
unions, in Marxian theories of class action, in concepts l)f "countervailing power," and in various discussions of eoonomic institutions.
It has, in addition, occupied a prominent place in political science,
at least in the United States, where the study of pressure groups has
been dominated by a celebrated "group theory" based on th idea
that groups will act when necessary to further their common or
group goals. Finally, it has played a significant role in many wellknown sociological studies.
The view that groups act to serve their interests presumably is
based upon the assumption that the individuals in groups act out
of self-interest. If the individuals in a group altruistically disregarded
their personal welfare, it would not be very likely that collectively
they would seek some sellish common or group objective. Such
altruism, is, however, considered exception and self-interested be
havior is usually thought to be the rule, at least when economic
issues are at stake; no one is surprised when individual businessmen
seek higher profits, when individual workers seek higher wages, or
when individual consumers seek lower prices. The idea that groups
tend to act in support of their group interests is supposed to follow
logically from this widely accepted premise of rational, self.interested
behavior. In other words, if the members of some group have a
common interest or objective, and if they would all be better off if
tnat objective were achieved, it has been thought to follow logically
that the indiyiduals in that group would, if they were rational and
self-interested, act to a.;hieve that objective.
But it is fJDf. in bet true that the idea that groups will act in their

Thtr Logic of Collective A.cti()fl

lntrod.,ction

self-interest follows logically from the promise of rational and sdinterested behavior. It docs nC>t follow, be<:ause all of the individuat.
in a group would gain if they achi vcd thcir group objective, that
they would act to achieve that objective, even if they were all rational
and self-interested. Indeed, unless the number of individuals in a
group is quite small, or unless there is coercion or some other special
device to make individuals act in thcir common interest, rl<tirma/,

None of the statements made above fully applies to small groups,

for the situation in small groups is much more complicated. In
small groups there may very well be some voluntary action in support of the common purposes of the individuals in the group, but
in most cases this action will ase before it reaches the optimal
levd for the members of the group as a whole. In the sharing of the
costs of efforts to achieve a common goal in small groups, there is
however a surprising tendency for the "exploitation" of the greal
by the small.
The proofs of all of the logical stattments that have bc:<:n made
above are contained in Chapter I, which develops a logical or theoreti
cal explanati.,n of certain aspects of group and organi ational behavior. Chapter II examines the implications of this analysis for group
of different size, and illustrates the conclusion that in many cases
small groups are more efficient and viable: than large ones. Chapter
III considers the implications of the argument for labor un;ons, and
draws the conclusion that some form of compulsory membership is,
in most circumstances, indispensable to union survival. The: fourth
chapter uses the approach devdopd in this study to examine Marx's
theory of social classes and to analyze the theories of the state developed by some other economists. The fifth analyzes the "group
theory" used by many political scientists in the light of the logic
elaborated in this study, and argues that that theory as usually ul'ldtr
stood is logi'"IIY inconsistent. The final chapter develops a new
theory of pressure groups which is consistent with the logieal relatiol'lships outlined in the first chapter, and which suggests that the
membership and power of large pressure-group organizations does
not derive from their lobbying achievements, but is rather a byproduct of their other activities.,
Though I am an economist, and the tools of analysis used in this
book are drawn from economic theory, the conclusions of the study
are as relevant to the sociologist and the political scientist as they are
to the economist. I have, therefore, avoided using the diag-rammaticmathematical language of economics whenever feasible. Unfortunatoly, many noneconomists will lind one or two brief parts of the
first chapter expressed in an obscure and uncongenial way, but all
of the rest of the book should be perfectly clear, whatever the reader's
disciplinary background.

selfintl!rested individ.,t ls will not act to achieve their common or

[{1'0"(' intl!rt'tt!, In other words, even if all of the individuals in a
large group are rational and self-interested, and would gain if, as a
group, they acted to achieve their common interest or obj<etive, they
will still not voluntarily act to achieve that common or group interest.
The notion that groups of individuat. will act to achlcve their .common or group interests, far from being a logical implication of the
assumption that the individuals in a group will rationally further
their individual interests, is in fact inconsistent with that assumption.
This inconsistency will be .,.pJained in the following chapter.
If the members of a large group rationally seek to maximize their
personal welfare, they will not act to advance their common or
group objectives unless there is coercion to force them to do so, or
unless some separate incentive, distinct from the achievement of the
common or group interest, is offered to the members of the group
individually on the condition that they help bear the com or burdens
involved in the achievement of the group objectives. Nor will such'
large groups form organizations to further their common goals in
the absence of the coercion or the separate incentives just mentioned.
These points hold true even when there is unanimous agreement in a
group about the common good and the methods of achieving it.
The widespread view, common throughout the social sciences, that
groups tend to further their interests, is accordingly unjustified, at
least when it is based, as it usually is, on the (sometimes implicit)
assumption that groups act in their self-interest because individuals
do. There is paradoxically the logical possibility that groups com
posed of either altruistic individuals or irrational individuals may
sometimes act in their common or group interests. But, as later,
empirical parts of this study will attempt to show, this logical possi
bility is usually of no practical importance. Thus the customary view
that groups of individuat. with common interests tend to further
those common interests appears to have litde if any merit.

I
A Theory of Groups and Organizations
A.

TilE PURPOSE OF ORCA!i/IZATION

Since most (though by no means all) of the action taken by or on

behalf of groups of individuals is taken through organizations, it will
be helpfuhoconsrdcr organizations in a general or'thcorcf arway.----"The logical place to begin any systematic study of organizations is
with their purpose. But there arc all types and shapes and sizes of

organizations, even of economic organizations, and there is then

some question whether there is any single purpose that would be

characteristic of organizations generally. One purpose that is nonetheless characteristic of most organizations, and surely of practically
all organizations with an important economic aspect, is the further
ance of the interests of their memberS. That would seem obvious, at
least from.the economist's perspective. To be sure, some organizations
may out of ignorance fail to further their members' interests, and
others may be enticed into serving only the ends of the leadership.$
I. :Eeonorrtit:ts have for the most part neglected to d , :vll!lop theories of organiza
lions., but there are a f works. from j'l 00nomie poi.ot of view Q.D r:ht! J,bj t. t
f.ot example, three papers by Jacob Matschak, "ilemenu for a ry of Teama,"
M qlf.lemr:n $ric"" J (Jat'l.u;ar)' 195!5), 127.... 137, "TQW ds .:UI. EconQmie Tbt: Qt)' (It
Or.anizadon :.nd Information," in J) d.n'()n Prousus, .ed. R,, M, Thrall, C. H, Combt,
and lt L. Davi$ (New York: Juhtt Wiley, 1954), pp, 187-2201 ;\nd "Eflident :utd
Viable Organization Forms," in Modt'fn. Orglf.niflntion Tlurory, ed. Mason Haire (Nrw
York: John Wile . 19:>9), pp. 307-320; two paprs by R, lladner, "Applic;tti(ln c>f
Linear PrQgramming to Team Dec:isi.on Problem&/' Mttna11ement Science, V (January
1959), 143....150, and "Tc:un DcdsU,n Problem,," Atmals oj Mdtlunnau'cal StdliJti('t,
XXXIU (S<pl<mb<r 1962), 8 7-881; C. B. McGuire, "Some Team Model ol Sal"'
Otpni:u iotl," Mtmaremntt Sdtt t:t, VII (J:4nt..tar;r 1961), 101-130; 0Jkar Morgen
stern, Proltgt:ffnt:na to a T/l.t:Qry 11/ Organi: Mion (Santa Monica, Calif.: RAND
Re:Jeat<h Memorandum 734, 19SJ); Jamco G. Mir'(h and Hcrbctt A. Simon, Or,tiriiJld
tiont (N' w York: John Wil.:::y, 19,8); Kenneth 8oulding, TAt OriarJi:ati(Jfllll
[W'IIQ/u,io" (Ncw1 York: Harper, 1953).
2. Max Weber called attention to the cue where ao organization cc>ntiDI,Iei tQ Cll!ll;itt
for ;orne: time after it ha$ b omc me:aningleN aur;e some olfic:ial is making a
living out of. it. See his Th qry Q/ $r; "j,J IUid Ero,Qm/ 0rtmt':rtJrion, tram. 'talcott
Par.f(lns nd A.. M, Hend4rson (New 'YQrk: Oxford t)nivenity Pre . 1947), p. 318.

Tht Logic of Collecriv Action

A Throry of Groups and Organi:rations

But organi:<ations often perish if they do nothing to further the

interests of their members, and this factor must severely limit the
number of organiutions that fail to serve their members.
The idea thar organiutions or associations exist to further the
interests of their members is hardly novel, nor peculiar to economics;
it goes back at least to Aristotle, who wrote, "Men journey together
with a view to particular advantage, and by way of providing some
particular thing needed for the purposes of life, and similarly the
political association seems to have come together originally, and to
continue in existence, for the sake of the gm<Tal advantages it
brings." 8 More recently Professor Leon Festingcr, a social psychologist, pointed out that "the attraction of group membership is not so
much in sheer belonging, but rather in attaining something by means
of this membership." The late Harold Laski, a political sdentist,
took it for granted that "associations exist to fulfill purposes which
a group of men have in common." 1
The kinds of organizations that are the focus of this study are
t:x:pecud to further the interests of their members. Labor unions are
expected to strive for higher wages and better working conditions
for their members; farm organizations are expected to strive for
favorable legislation for their members; cartels are expected to strive
for higher prices for participating firms; the corporation is expected
tO further the interests of its stockholders; 1 and the state is expected

to further the common interests of its citizens (though in this nation.

alistic age the state often has interests and ambitions apart from those
of its citizens).
Notice that the interests that all of these diverse types of organi.
utions are expected to further are for the most part common

3. tlu'c1 viii.9.1160a.
4. Uon Ft:sting(:r, ''Group Anr tion. ; nd Mi!m rship," in GffJ P [)yrJ11mics, !.
Dotwin Cl\rtwrisht ;md Alvin Zandc=t (Evannon, JII,: llow, Pc=tc=rson, I95JL p. 93.
5. A GrammtV of PQ/#i(l, ift:h ed. (London: Geotgc Allen Unwin, 1939), p. 67.
6. Philanthropic and relisio1.1s orpnizations arc= not nete$sarily c:xpo:ted to serve
Qnly the= interest& of their members; auch organizations hav : oth :t p1.1rpo s that are
considered more: irnpol'l nt, howenr muGb thc=ir members "ne t to brlong, ot ilore
improvro or hdpc=d by bc:longinJ. But the complexity of such org ni tions nd not
be debiitcd at lcn,-th here, uu: this study will focu; on organizations with
ignificant emnomk aspt. The c:mpba.tis re will have 110mc=tbing in common with
what M11x Weber :ailed the 'as!QGiative group"; he= eallcd sroup asSO(;iative if "me
orientation of &O(ial ac:;tion with it i'c'$ti on a rationally motivated agfeer'r'l m." Weber
contrasted bit. "a odative sro1,1p" with the= "communal j'fOI.IP .. which was. centered
on personal atlrttion, c=rotic rdatioruhips, etc., like the family. (S Weber, PP I3l).....
139, and G.!' Ce Coyle, SOL"itJl Proctm ir Orgtmi% d Gr(u,pJ, New York: Richard Smith,
Inc. 1 1930, pp. 7-9.) The logic:; of the theory developed here can a.tended to cover
communal, tcliaiou . nd philanthropic Qrganizations, but the theory i.s not particularly
U$eful in studying such groups. See my pp. 6lnl7, 15'9-162.
7. That is., it& mctnbc:ts. This .t.mdy does not follow the tc:tm.inoloik.Oll uu.gc: of
tho.te ora.jl.lli:r.ation theoria:tlii who dc=Ktibc em,ployee.t u "membaa'' of the= organi:tation
for wll:ieh lhey wark. H re it ia more: t:onvct.li.cn( tQ o.i1Qw thl! language of evctydl\y

interests: the union members' common interest in hight:r wages, the:!

farmers' common interest in favorable legislation, the cartel members'
common interest in higher prices, the stockholders' common interest
in higher dividends and stock prices, the citizens' common interest in
good government. It is not an accident tbat the diverse types of
organizations listed arc all supposed to work primarily for the
common interests of their members. Purely personal or individual
interests can be advanced; and usually advanced most efficiently, by
individual, unorganized action. There is obviously no purpose in
having an organization when individual, unorganized action can
serve the interests of the individual as well as or better than an
organization; there would, for example, be no point in forming an
organiution simply to play solitaire. But when a number of indi.
viduals have a common or collective interest-when they share a
single purpose or objective--individual, unorganized action (as we
shall soon sec) will either not be able to advance that common
interest at all, or will not be able to advance that interest adequately.
Organiutions can therefore perform a function when there are
common or group interests, and though organizations often also
serve purdy personal, individual interests, thdr characteristic and
primary function is to advance the common interests of groups of
individuals.
The assumption that orgarii:eations typically exist to further the
common interests of groups of people is implicit in most of the
literature about organizations, and two of the writers already cited
make this assumption explicit: Harold Laski emphasized that organ
izations exist to achieve purposes or interests which "a group of men
have in common," and Aristotle apparently had a similar notion in
mind when he argued that political associations are created and
maintained because of the "general advantages" they bring. R. M.
us.agt: insre.: .d, nd to distinguish the membt:rs Q{, )'. Q union from the employc=c=s
of thr union. Similarly, the membc=ts of the= union will M: considered employees of
the corporation for whic:;h thc=y work, whf::ru$ the memberi of the corpotation ar
tht! c:omm '.ttoe.kholdc:rs.

A TMary of Groups rznd Orgrznizrztirms

The Logic of Coll<ctivc Action

Maciver also made this point explicitly when he said that "every
organization presupposes an interest which its members all share."
Even when unorganized groups are discussed, at least in treatc
ments o "pressure groups" and "group theory," the word "group"
is used in such a way that it means "a number of individuals with
a common interest." It would o course be reasonable to label even a
number of people selected at random (and thus without any comJ_Don
interc t or unifying characteristic) as a "group"; but most dtscusSions
of group behavior seem to deal mainly with groups that do have
common interests. As Anhur Bentley, the founder of the "group
theory" o modern political science, put it, ''there is no group without
its interest." The social psydtologist Raymond Cattell was equally
explicit, and stated that "every group hasits interest.u 10 This is also
the way the word "group" will be used here.
Just as those who bdong to an organization or a group can be
presumed to have a common interest, 11 so they obviously also have
purdy individual interests, diliercnt from those of the others in the
organi..ation or group. All of the members of a labor union, for
example, have a common interest in higher wages, but at the same
time each worker ha.. a unique interest in his personal income, whicjl
depends not only on the rate of wages but also on the length of time
that he works,
8, R. M. M:aclvu, "lntc c,U," Ent.'yclo(Httd/4. tJ/ t!J8 SotUt/ Sd fJus, VII (New York:
Macmilhan., 1932), 147.
9. Anhul' Bentltty, TAt: PrtX #

;J

GOIIN"nme>lll

(Evanaton,

1919), p. 211. D"vid. B. 'iruman tak .s a similar apptoaeh;

m.:

Principia Press,

h'Ui Tht Govtmmtmlfl

(New York: Alircd A. Knopf, 1958), pp.H-35. See .al10 Sidney Vrbll,
Sm#JI G fiJ tmd Politi"dl BtlttJviM (Priner:ton, N.J.: Prin<:cc University Preu,
1961), pp. 12-ll.

Prot-4JJ

10. Raymond Cattell, "ConcepU :llnd Mcothod.s in the Mc:aturttmcnt of Group

Syntallty," in Smldl Gro pt, ed. A. Paul H; te, Edgard P. Bora:uta, and .Robert F.
Bales (New York: Alfred A. Knopf, 1955), p. 115.
ll. Any organization or aroup will of <:our usually be divided into subgtou . or

faction 1 h u are l)ppostd to ont' anotht!:r. 'I"hn fa(t doe! not weakcti the .assumption
m<i!dc h rt that organizations exist to servt' the :ommon irttcrC tt of membc;t$ for du::
ul!ump ion does not imply that intragroup conflic:t ill\ nglected. The opposmg group"
wlthin an organization otdinarily have $0MC intttrest in rommon (if not, wb wQuld
chey maintain the organiza iofl?), and the membe-rs of any subgroup or fa(tlon alt-o
have a M:patatc c;ommon intert'$t of their own. They will ind:d o( en hue: a
(Ort'IP'IQ.Il purpose in defeitin,Q' some othe-r ubaJ:rQup or faction. The approach u
here doe$ not. neal t the: confli"t wi hin groups and ol'$'anizat:il)na, then, bocau e It
ooruidet.s each organization ;U a unit only to the extent that it docs in f attempt . o
serve a common int;rest, and comidc:t.10 the Yarious subgroupt
the relevant \lftlt'
with ec:ammo,q. J,ntcrefit& to nalyze the facrional trite.

B.

J?TJJJI.,IC GOOVS AND LARGE GROUPS

The combination of individual interests and common interests in

an organization suggesu an analogy with a competitive market. The
firms in a perfectly competitive industry, for example, have a com
mon interest in a higher price for the indus!:ry's product. Since a
uniform price must prevail in such a market, a firm cannot expect a
higher price for itself W'lless all o the other firms in the industry also
have this higher price. But a firm in a competitive market also has an
interest in selling as much as it can, until the cost of produdng an
other unit exceeds the price of that unit. In this there is no common
interest; each firm's interest is directly opposed to that of every other
firm, for the more other firms sdl, the lower the price and income
for any given firm. In short, while all firms have a common interest
in a higher price, they have antagonistic interests where output is
concerned. This can be illustrated with a simple supply-and-demand
model. For the sake of a simple argument, assume that a perfectly
competitive industry is momentarily in a disequilibrium position,
with price exceeding marginal cost for all firms at their present output. Suppose, too, that all of the adjustments will be made by the
firms already in the industry rather than by new entrants, and that
the industry is on an inelastic portion of its demand curve. Since
price exceeds marginal cost for all firms, output will increase. But as
all firms increase production, the price falls; indeed, since the in
dustry demand curve is by assumption inelastic, the total revenue
of the industry will decline. Apparently eaeh firm finds that with
price exceeding marginal cost, it pays to increase its output, but the
result is that each firm gets a smaller profit. Some economists in an
earlier day may have questioned this result,u but the fact that profit.
maximizing firms in a perfectly competitive industry can act contrary
to their interests as a group is now widely unders!A)C)d and accepted.ll
A group of profit-maximizing firms can act to reduce their aggregate
profits because in perfect competition each firm is, by definition, so
small that it can ignore the effect of its output on price. Each firm
finds it to its advantage to increase output to the point where mar12. S c: J. M. Clark, The E ont1rnif?s of OvN'Arad Cosu (Chit: go: University Qf
ChicagQ Preu, l9.23), p, 417, iind Friihk H. Knight, Ris . Unen-hllnly d.'lf.d Profil
(Bo<on: Houghtol, Miillin, 1921), p, 193,
13, .Edward H. Chambt<tlin, M;;.tat1#'Qiittic ComfMtilion, 6th cd. (cambridge, Mas.11.:
H...rv;atd Univcn;ity Pres.&, 1950), p. i.

The Logl'c of Colltctive Acti<m

A Theory of &oups and OrgtmiJ<arions

gina! cost equals price and to ignore the effects of its extra output on
the position of the industry. It is true that the net result is that all
firtrts are worse off, but this does not mean that every firtrt has not
maximized its profits. If a firm, foreseeing the fall in price resulting
from the increase in industry output, were to restrict its own output,
it would lose more than ever, for its price would fall quite as much
in any case and it would have a smaller output as well. A firm in a
perfectly competitive market gets only a small part of the benefit (or
a small share of the industry's extra revenue) resulting from a
reduction in that firm's output.

For these reasons it is now generally understood that if the firms

in an industry are trtaximizing profits, the profits for the industry as
a whole will be less than they might otherwise be." And altrtost
everyone would agree that this theoretical conclusion fits the facts for
markets characterized by pure competition. The important point is
that this is true because, though all the firtrts have a common interest
in a higher price for the industry's product, it is in the interest of
each firm that the other firms pay the cost-in terms of the necessary
reduction in output needed to obtain a higher price.
About the only thing that keeps prices from falling in accordance
with the process just described in perfectly competitive markets is
outside intervention. Government price supports, tariffs, cartel agree
ments, and the like may keep the firms in a competitive market
from acting contrary to their interests. Such aid or intervention is
quite common. It is then important to ask how it comes about. How
does a competitive industry obtain government assistance in maintaining the price of its product?
Consider a hypothetical, competitive industry, and suppose that
most of the producers in that industry desire a tariff, a price-support
progratrt, or some other government intervention to increase the price
for their product. To obtain any such assistance from the govcrn ent,
the producers in this industry will presumably have to orgamze a
lobbying organization; they will have to become an active pressure
group." This lobbying organization may have to conduct a con-

sidcrable campaign. If significant resistance is encountered, a great

amount of money will be required. 10 Publlc relations experts will be
needed to influence the newspapers, and some advertising may be
necessary. Professional organizers will probably be needed to organ
izc "spontaneous grass roots" meetings among the distressed producers in the industry, and to get those in the industry to write
letters to their congrcssmen. 11 The campaign for the government
assistance will take the time of some of the producers in the industry,
as well as their money.
There is a striking parallel between the problem the perfectly
competitive industry faces as it strives to obtain government assistance, and the problem it faces in the marketplace when the firms
increase output and bring about a fall in pric"-fa:ndf lrwat not
rational fw a part,'cu/ar prodacl.'t' to re:nrict his output in wdl.'t' that
ther might be a hight<r pric far the pmd1<ct of his induJtry, so it
Wl>uld not be rational for him to sacrifiu his time and money to
support a lobbying organizaTion to obtain govN'IImtnt auistanu for
the industry. In neith<'l' cau would it be in the interest of th individual producer to assume any of the costs hims lf. A lobbying

10

14. For

11

f ll'=r discussion of thi$ question see Man(m' Olson, Jr., and David

McFarla11d, "'I'hc: .Restoration

ot

Pure Monopoly and ,h; Concept o the Ind\.lstry,"

organt.'zation or indtcd a labor uniOn or any other organization,

working;, th interest of a large group of firms or workl.'t's in tome
induttry, W(JU/d g<t no tWistance from th< rational, ulf-intt:r<.<td
individuals in that industry. This would be true even i everyone in

the industry were absolutely convinced that the proposed program

was in their interest (though in fact some might think otherwise
and make the organization's task yet more difficult).'"
Although the lobbying organization is only one example of the
logical analogy between the organization and the trtarkct, it h of
trans.. .Eden and Cedar Paul (New York: 0Qv : r Publicatioru, l9S9), p,P. 21-22. S:
also R.Qbert A. Brady, Bu:dn ll as a Syn of P wtr (New YQ.I'k: Columbia Univcnity

p,..,., 1943), p. 193.

16.. Alexander tard, Th Corti of

DtmQ

(ChaJM:l Hill: TJni11et$ity of North

Caroh.na Preu, 1960), especially note I, pp. 95-96, For c:x.ainple, i.n 1947 the Natiofial
A&IIOCi.uioq of Manuiactqren: spC'nt over $4.6 million, and <t'ller :tomcwhat longtr
period the Amcdcall Medic.d AsliOCiation spent u much on a c JmpaiaP against
compui: Qry health insur nc:c.
17. "If the full ruth were ll:Vflit known ... lobbyi g. in all ita ramiiication$,.Would
prove tQ be a billion dol!;ar indu&try." tJ,S. Congress, lic>ute, SC'Ic:<t Committee on
bbying Activiti t;,,,R port, 81st Cong., 2nd Sc:ss, (1950), a111 quoted in the C< n,nt

LXXVI (N(Ivmbc:r 1962), 613.-631.. .

,
15. Robtrt Mkhds contcnda. in hii classic stud)' tha "d mocracy 15 lilCOA!';OI'III!lble
wi out organization," nd that .,the prinr:ipl; of Mganization. is a . bs.olut ly

n<Jtlt l f.?ut rt rl')l dlmanat', 8hl Cong., 2nd S;n., Vl 1 '64-765.

18.. For a loai <&lly possibl!!i bur praetically me:aninJI ::u c.:<;cptio.o. lQ

cssco l c:opdition for the poli ic.al $truggle of the mali:K\'1," Sf: t: hu, Polltl"al Pmi,e-tl

of th1a paraQ'I'i :ph, r;ee fwtnQ[C 68 in this chapt;t,

Qut rlerly /I'JurtltJ/1>/ EconomiN,

11

; c:onc.lu&loo

A Throry of Groups and Organizations

13

Tht: Logic of Collective Action

12
some practical importance. There are many powerful and wellfinanced lobbies with mass support in existence now, but these lobby
ing organizations do not get that support because of their legislative
achievements. The most powerful lobbying organizations now obtain
their funds and their following for other reasons, as later parts of this
study will show.
Some critics may argue that the rational person will, indeed,
support a large organization, like a lobbying organization, that works
in his interest, because he knows that if he does not, others will not
do so either, and then the organization will fail. and he will be
without the benefit that the organization could have provided. This
argument shows the need for the analogy with the perfectly competi
tive market. For it would be quite as reasonable to argue that prices
will never fall bdow the levels a monopoly would have charged in
a perfectly competitive market, because if one firm increased its out"
put, other firms would also, and the price would fall; but each firm
could foresee this, so it would not start a chain of price-destroying

A most important type of organization--the national state--will

serve to.test this objection. Pat_riotism is probably the strongest non
ccon_omtc motive for orgaruzauonal allegiance in modern times. This
age. sometimes called the age of nationalism. Many nations draw
additional strength and unity from some powerful ideology, such as
democracy or communtsm, as well as from a common religion language, or cultural inheritance. The state not only has many' such
powerful sources of support; it also is very important economical!".
.Almost any government is economically beneficial to its citizens, ln
that the law and order it provides is a prerequisite of all civilized
econo ic activity. But despite the Ioree o patriotism, the appeal of
the nauo l Ideology, the bond of a common culture, and the in
d1spensabt tty of the system ..of Jaw and order, no major state in
modern hiSto y has been able to support itself through voluntary
ue or contributions. Philanthropic contributions are not even a
s1gmficant source of revenue for most countries. Taxes, compulsory
payments. by defi iti n, are needed. Indeed, as the old saying indi-

increases in output. In fact! it does not work out this way in a

competitive market; nor in a large organization. When the number

If the state, with all of the emotional resources at its command

of firms involved is large, no one will notice the effect on price if

one firm increases its output, and so no one will change his plans
because of it. Similarly, in a large organization, the loss of one dues
payer will not noticeably increase the burden for any other one
dues pay, and so a rational person would not believe that if he
were to withdraw from an organization he would drive others to
do so.
The foregoing argument must at the least have some relevance to
economic organizations that are mainly means through which indi
viduals attempt to obtain the same things they obtain through thdr
activities in the market. Labor unions, for example, are organizations
through which workers strive to get the same things they get with
their
individual
market-higher
conditions,
and efforts
the like.inltthe
would
be strange wages,
indeed better
if the working
workers

cates, thetr necess1ty

ts

as certain as dc:ath itst:lf.

cannot finance its most basic and vital activities without n::sort

compulsion,, it wou d seem that large private organizations might

!so have dtfficulty tn getting the individuals in the groups whose
mterests they attempt to advance to make the necessary contributions
voluntarily.'"
The reason the state cannot survive on voluntary dues or payments,
19. Soc::io gists as ell u eco.nomist1 have: ob rved that idmlogical mocives alone
not sudi 1ent to bnng fotth the contlnuina e.ffon of large,: manc::s Qf people. Mn.

;\tt::

Weber providt'

notable example:

11.

".An. onomic atti ity in

market onomy io ul'ldcrQke.a, and carried through
by mdlviduals. for U' ?wn ,uleal ot Mitctiallntercsts. Thh: I$ naturally just aa: true
w n eco om e acnv1t 111 onc:nted to the patterns of order of corpor;a.tc aroups .
.Even tf an econom1c system were organized on a SO(:ialitic ba$l$: ther : would bt
no fundax;ncnt l d :tcnc.e in thi;. res t , , . 'I'he structure of t:trests and the

releva t SitUation mlJht changej there: would be other !Dea.rt& of pwu1i.n.g intem:u
but

tru

thi&

fundamental h(;tOt' would t :tmai.n j1,1st

tht

'

did not confront some of the same problems in the union that they
meet in the market, since their efforts in both places have some of the
same purposes.
However similar the purposes may be, critics may object that atti
tudes in organizations are not at all like those in markets. In organizatiom, an emotional or ideological dement is often also involved.
Does this make the argument offered here practically irrelevant?

relevant .:u:

1...t

l,leti.Q

It u ' ,

t;t.t

'

OUt!lf!

oriented on purely ideological grounds

c
.

all

a cconomK: actlQn wh1ch u

to the
mtc: cu o_f other$ doe. l!ii ist. B t it i cYen more certain that the man of mea do not
act w u way, and tt 1s an mducuon ftom experience: that they cannot do so and

never wall ...

"Ia .a. market CCQDQmy the interest in the mui.tnilatio.o of i.o.comc ii nccau.t:U
the dnvmg force of: all cconomi a ;th1i[y," (Weber, pp. 319-320.)
y
Talcott Par.!l(l a d Neil S eh.er go even further in postulating that "perfonnam:e"

ht ug out 50(;Jcty
c:u

15

P!opottlonal o the "reward$" and ".u.ncdon$" invohted. see

EronomJI tmd SQellt

(Oiem:oe, 111.: Fl'l:!c Pt ::$.$, 195 ). pp.

SQ-69.

14
but must rely on taxation, is that the most fundamental services a
nationstate provides are, in one important respect, like the higher
price in a competitive market: they must bo available to everyone
if they aro available to anyone. The basic and most elementary
goods or services provided by government, like defense and police
protection, and the system of law and order generally, are such that
they go to everyone or practically everyone in the nation. It would
obviously not be feasible, if indeed it wore possible, to deny the
protection provided by the military services, the police, and the courts
to those who did not voluntarily pay their share of the costs o
government, and taxation is accordingly necessary, The common or
collective benefits provided by governments are usually called "public
goods" by economists, and the concept of public goods is one of the
oldest and most important ideas in the study l)f public finance. A
common, collective, or public good is here defined as any good such
thar, if any person X, in a group X,, . ,X,, .. ,X. consumes it,
it cannot feasibly be withheld from the others in that group.'' In
20, See, however, $CCtlon E of this ch; pttr 1 on "exclusive'" and "inclusive" a:roups.
21. Thi.t. simple definition foouse$ up(ln two points that are important in .he pmenf
contc::xt. The Ar t point iJ that mo:!.t collective goodt. c.an only be defil\cd wtth re.t.pect
to some pecific gto Jp, One Cllettivc at>Od gCX:$ to one a:roup of people, anQthet
collccdve good to anothct group; ooc may br:nefit the whole world, anodw only two
spc:<:iAc people. Moreover, some s:oods arc collettive goods to tho!lt ,in .o gtoup and
t the 5ame time private goods to thoM i.n afiOth('.!, b USi! some mdmduats r.an, be
kept from c:oP5Umi.ng them and oth rs r::an't, 'rake for example!: the: par de that a
c:oll 'iv good to 2.1! thos-e who live in tall bi.Jildings ov :tluoking the par de rou,e,
but which ppcan to btl!' a priv:. te good {0 those who can R it only by buyij'lg tickt'ts
for a seat In the s ands along: the way. The sc<;ond point iii- that 011Cc th levant
group has b :n defined, the defil'litiun u ed here, lik; Musgrav :'.t, distinauishe:s ,;ol..
loc:tl.ve good in tctms of infea lbility of exdudins potcn iiiil consumers of Uk good.
'thi.!i approa'"h is used because oollc;cdve good' produced by' organi ation& of all kindt
&e;m to be such that c ::lusion b normally not Ma,ible. To be sure, fur some .:::olte ;tivc
goodt it is physically pouible to practi.ce t'll: luslon. Bu[, as Head hu shown, it i& ,;.Qt
ncee.ssary thu exdusioo be technically impossible; it i:5- only neccnary th t, t tJ;e
infeuibl!!: or u 11 :c()Oomi, Head haJ dso shown most clc:.rly that nonexch.ld; billly 1.$
only one of two basic element' in the (aditioC al \lndentandins of J)\lbHc good . 'nu:
<>ther, he points ou . is ")ointi\CU of 1upply." A gOQd has "jointnen" if makinB it avail
able tQ one in.dividual means tha It tan be easily ot freely s1.1pplied o othen a' well.
'I'he pol;tt case of jQintness w ; uld be S;tmuel&on' pure public good, whk;h i$ a good
s\lch that additional consumption of jt by one indliiidual r;1(1('s not dimini,h tht'
amoun ..vailablc to others. :By the dcl\nitioo 1.Ued here, joi.otness not a n::<:esAI')'
auributc: of public good. As l; et parts of this chapter will show, at if:!:ast one rype
Qf (oll dve good t:;Qnsiderc::d here aMbits no jQintness whatever, nd ew if any
wot.tld have ,h degr of )ointneJ' ncedt'd o qualify ill- pure p1,1bHc goods. Notic:thlll!
leu, m t of the oll4Ctivc goods to b4: studied ere o display a l..rge m sure of
jointness. Oo the defi.1\ition and importan. of pubhc goo(h, su: John 0. H d;

A Theory of Groups t d Orgd'llizuttions

15

other wo ds, those who do not purchase or pay for any of the public
or collecll.ve good cannot be excluded or kept from sharing in the
consumptiOn of the good, u they can where noncollective goods are
concerned.
Stude?ts of public finance have, however, neglected the fact that
the tzt'hte m t of any common goal or the satisfa tion of 111ny
t:()fllmon mterell mlfans that a publi or collective good has be
provldU for that group." 2 The very fact that a goal or purpose is
common to a gro p m ans that no one in the group is t:xduded from
the eoefit or sat1sfact1on brought about by its achievement. As the
opem g aragraphs of this chapter indiGated, almost all groups and
org mzattons have the purpose of serving the common interests of
e r me ber.s, MJt. M. Maelver puts it, "Persons ., , have <:ammon
nt r s s 1n the degree to which they participate in a cause , , , which
'?d!VlS!bl embr ces them all." 28 It is of the essence of an organlza.
uon that It prov1des an inseparable, generalized benefit. It follows
that the provision of public or collective goods is the fundamental
f nctlon of or'!"'nizatio s generally. A state is first of all an organiza.
non that prov1des public goods for its members, the citizens; and
oth r types of organizations similarly provide collective goods for
thar members.
And ju t as. a stat cann?t support itself by voluntary contributions,
or by .sel ng tts bas1c serv1ces on the market, neither can other large
organ1zat10ns support themselves without providing some sanction,
" ublic Good and Publie Poli!!y,'' PubUt.' p,,ilnN, VQt, XVII, no, 3 (1962), 197-219
R dtard Musgrav , 'l'lttt Th Wry of PubUt' F 'n11nc.:- (New York: McQr.nrrHill 1959):
Pa J. A. Samuc:l ti, "The Pure "nll!ory of Publi .Expenditure," "Oiagl"a ti<; EJ:
posnt fl ?,f ,A Th ry of Public E:cpenditur.eo," and "Aspects of llubli JS.xpcnditure
'l"heones:, w R4't ew CJ/ E&'Qnomi"r tZntl SJt tilli'"' XX.Xl/1 (N'ovembt:r 1951), 387390, XXXV ! (Nov<m"':r 19$5), 350-356, 011d X (November 1958), 3 2-3 8. For
$0'?ewhat d1 .,r t op1naom about the usefulnc:u of the CQncept of public good"
Juh1.1$ M,argohs, A mmcnt on the Pure Th.ory of Public Expcnditur ," RtlliiW 9f
cQru.mu"r tmd
thr:t, XXVU (NI)vtmbti:f 195.5), 347......349, nd Gc::thatd CoJm,
T eory Pubhc J!; pendltul'es," .A.rm11it of lh ,Am.ffltan A.r'tklttmy of PDJ;titl.l flni
S..W S"'"". C XXX111 (January 19 6), 1-11.
. 22 ',f'herc: as no DC\CC:s ity that :a public good to one group in 1aociety j necc..arily
n the Interest Of !he let)' as a whoJ . J I$ a tariff could 1,. pubJj(: good to tb
mdu try thar sought 1t, so the:: t ::tnoval of the tariff' cou1d be a public .iQ(ld t tb
who ton.sumed. the jndu:stry's produc . Thii; i1 equally trye when the publ
con ept .'$ i phcd o ly, to alve nmeots; for a military apc::nditurQ, or 1 tariff, ot
;tl'l, zmgration rentJ(;tion that 1s
public good to one t:.Owatry could be a tpgbUc
bad to another country, .and harmful to world $1Xic::ty 11 a whole.
23. R. M. Macher in E11f?Jidoptlttdi4 >/
S9!:W sdnle . vn, 147.

,,#

16

A ThMry of Groups and Organizations

The Logic of Colltctitll!' A ti011

or some attraction distinct from the public good itsc:lf, that will lead
individuals to hdp bear the burdens of maintaining e o gani.za?on.
The individual member of the typical large organtzatlon IS a
position analogous to that of the fir in a perfect! competitive
market, or the taxpayer in the state: hi own c or will not have a
noticeable effect on the situation of h1s organizatiOn, aod he ean
enjoy any improvements bro ght ab ut y others whether or not he
has worked in support of his organzation.
. .
There is no suggestion here that . states or other orgamzatl ns
provide only public or collective goods. Governments often prov1de
noncollective goods like deetric power, for example, and they usually
sell such goods on the market much as private firms wo ld. do.
Moreover, as later parts of this study will argue, large orgamzau ns
that are not able to make membership compulsory must also prov1de
some noncollective goods in order to give potential "?e bers
incentive to join. Still, collective goods are the characteristic orgaruzational goods, for ordinary noncollective goods can always be provided by individual action, and only where common pur ses or
collective goods are concerned is organization or group action ever
indispensable.u
C. 'l'HI 'l,'IW)!110NAL 'l'HIORY OP GII.OIJPS
Ther is a traditional theory of group behavior that im lici y
assumes t private groups and associations operate acco dtng .to
principles en ely different from those that govern the rdauonships
among firms in e maketplace or between taxpayers and the state.
This "group thco ' appears to be one of the principal concerns. of
many political scient1 in the United Sta es, as well s a IIiaJ r.
11
preoccupation of many ologists and soc1al psyc olog1sts. This
traditional theory of group e mo t other theories, has.been de
veloped by different writers WI varymg views, and .there IS accordingly an inevitable injustice in y attempt to gtve a common
24, It docs n01:, how.,vcr, follow 1hat Qr ed
good. c:

fllllltl)'i n ; t.ar)r' tQ obtain a oll tivc

Grou,pt.."'

"

o: coordioa .cro!lp ac; t'l

tlOD D

., .,

of thu dlaptc::t,

rna

2,. For a dlacussion of be importaoQ: of STOups

,
or the theocy of politics, K'C Verba, Stttt ll G"'"pt VJti
4t. ,01'; Truman
r;ov,.,mffll/11 Proclfl,' and Bc.ntley, Pro(; i/ (1/ Cover#mrn FQr n.amp ;s 9f the
type of rcsc:ar.::h and theory abou' groups in &OC-ial p$ycholo
and $0Cl0logy,
GN1Hp l>y8t rmiu, ed. Car wtiaht and Zandc(, ;;and Srmi/.1 Gt(J"fpl, . Hare, &rsatta,
and Jlaleo.

17

treatment to these different views. Still, the various exponents of the

tradi nal understanding of groups do have a common relation
ship to the approach developed in the present study. It is therefore
appropr1 te to speak here in a loose way of a single traditional theory,
provided at a distinction is drawn between the two basic variants
of .this theo : the casual variant and the formal variant.
In its most asual form, the traditional view is that private organizations and
ps are ubiquitous, and that this ubiquity is due to a
fundamental hu an propensity to form and join associations. As the
famous Italian po 'cal philosopher Gaetano Mosca puts it, men have
an "instinct" for ''h ding together and lighting with other herds."
This "instinct" also " derlies the formation o all the divisions and
subdivisions ...that ar within a g;vcri si5ciefy ariCJ O<:easion inoral
and, sometimes, physiea
nAicts." 24 Aristotle may have had some
similar gregarious faculty mind when he said that man was by
nature a political animaP 1 he ubiquitous and inevitable character
of group affiliation was cmpll sized in Germany by Georg Simmel,
in one of the classics of sociolo cal literature," and in America by
Arthur Bentley, in one o th best-known works on political
science. This universal joining ndency or propensity is often
thought to have reached its highest 1 tensity in the United States.
The formal variant of the traditio Iview also emphasizes the
universality of groups, but docs not
in with any "instinct" or
"tendency" to join groups. Instead it att ts to explain the associations and group affiliations of the present ay as an aspect of the
evolution of modern, industrial societies o t of the "primitive"
societies that preceded them. It begins with fact that "primary
groups" 81-groups so small that each of the mcm rs has face-to-face
26. Th Roling C/11 (Now York: McGraw-HUJ, 1939), p, 63.
21. Pttliri&'t i.2,9,J253a. Many otbera have also empbafized

human pro,PtD.Nty

LowiC , SrK.'I.I
Orfl"llialioo (Now York: Rloohan & Co., 19i8); Truman, .;pedal pp. 14-43.
28. Gcorr Silnmel, Coof/in ..J II < Wb I G,...p Atlilia#oot, u
Klll't WoUI
towatdl groqp$; see Coyle, SfX'illl

;, OrfdtJi*d Grot. /11;

rt

and Reinhard Bendix (Clencoc, Ill.; Free Press, l9SO).

29. Bcnlley, Proctu "' Gtmmtn#.
30. Al..io de To<quOYUio, Dm"""")' io Ammro (New York: N
Librvy, 1956), p. 198: James Bryce, Tb Amm<oo Co.,moowuhll, 4dt , (Now
York: Mac;millan, 1910), pp. 281-282; Cba.riO$ A. Beard and Mary
Boud,
Tilt Rbt "f.Arnm'cttn,. Cit ilit #o,, rev. . (New York: MacmUI . 1919), p , 761762: aDd Daniel Boll, Til Eod I /ollf>lou (Gicn<oc, Ill.: Froc p...,, 1960
p. 30,
31. Charles H. Cooley, Sifd Orfllllilnliirm (New Yotk: Cha.rlu kriboc:r'1