Anthony de Jasay on the free rider problem (2008)

Found in: Social Contract, Free Ride: A Study of the Public Goods Problem

Anthony de Jasay (1925-2019) believes that the presence of large benefits to free riders at the expense of others (the suckers) is the basic reason why society has so many examples of “non-contractual social co-ordination” or coercion:

Economics

In the last analysis, all arm’s-length social coexistence and cooperation that is not exchange under contract carries within itself an element of potential abuse by free riding. This is so because when benefits are not contractually tied to contributions both contributors and non-contributors have access to the benefit. The free rider can appropriate some part of it by taking advantage of others (the suckers) who would rather produce the benefit and share it with the free rider than go without it altogether. It tells something of the human condition that room for free riding, and the “strategies” that give access to it, turns out to provide the most basic explanation of the general principles of non-contractual social co-ordination. Our organization is what it is because the opportunities for free riding, offered by the provision of public goods, are what they are.

Thoughts

Jasay takes a game theoretic approach to studying the problem of the free rider and comes to some very interesting but rather depressing conclusions. At the heart of his political and economic theory lies the idea that free societies are fully capably of supplying what are called “public goods” through voluntary cooperation and exchange. This being so, the question then arises why societies have not evolved to the point where these goods are in fact provided by the free market; why have all modern societies gone down the route towards increasing state provisions of “pubic goods”, starting with the old standards of roads, money, and police, but now including health, education, and welfare as well. His answer is the popularity of the idea of a social contract which had as one of its original motivations the forcible inclusion of all individuals in the pool of taxpayers who would fund these services, and thus “suppress free riding.” However, an unintended and unplanned consequence of this original motive was to create political institutions where there are no or inadequate checks or balances to prevent the abuse of free riding. Since anyone can enjoy the benefits of using political coercion to free ride, everybody does so in order to prevent others from doing this first, a kind of “preventive and defensive” free riding. The end result of this process is the modern welfare state where there seems to be no end in sight to the free rider problem.

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