Monday, September 20

Collective action and logic

Richard B. McKenzie, writing for the Library of Economics and Liberty, explains collective logic and how it leads to harm: “One recent example of this collective logic at work is the new subsidies Congress has included in the current farm ‘reform bill for — are you ready? — popcorn.”

McKenzie explains: “Such thinking derives from ‘the logic of collective action’ that the late economist Mancur Olson laid out nearly a half century ago. As Olson pointed out, each person (or lobby) has an incentive to seek his (or its) special program because, while everyone bears the costs, only that person or group reaps the benefits. For that reason, the prospect of a fiscal doomsday is growing.”

Concluding: “The subsidies to popcorn farmers are hard to explain and justify on economic or health grounds, but they are easy to explain on political grounds.”

The article, which explains much more in detail, is Popcorn As Political Pork.