OLSON, MANCUR, JR.

(b. Grand Forks, North Dakota, 22 January 1932; d. College Park, Maryland, 19 February 1998)

economics.

Olson worked across disciplines and was at the center of an interdisciplinary group of scholars who shared many of his views and theoretical stances. In particular they started from the assumption that people are basically rational in their actions, and that this fact allows economists to simplify their explanations of social behavior and to construct broadly applicable theories. Olson was a founding presence in the Public Choice Society, which is one of the most broadly interdisciplinary among such societies.

Raised in North Dakota in an immigrant farming family from Norway, Olson received his B.A. from North Dakota State University in 1954, was a Rhodes Scholar at Oxford from 1954-1956, and earned his PhD from Harvard in 1963. He spent most of his professional life at the University of Maryland, College Park.

In his most influential work, The Logic of Collective Action (1965), Olson argued from Paul Samuelson’s elegant theory of public goods and their odd pricing problem: The cost of an additional consumer of a public good is zero, therefore the optimal price of it is zero. Samuelson argued that therefore such goods should be provided by the state, although exclusion mechanisms could elicit payment from consumers. In the book, Olson considers public goods that are privately provided through voluntary payments toward their production. His conclusion, of course, is that there will commonly be no provision of such public goods. Everyone will try to freeride and therefore there will be no provision on which to ride. This is the logic of collective action: Anyone’s contribution to the provision of a public or collective good will yield vanishingly small benefit to the contributor, typically much smaller than the cost of the contribution. No one therefore has any incentive to contribute and the good will not be provided.

Olson’s book and its central argument are a striking example of an idea that has often been grasped in specific contexts, but that had not been generalized in a compelling way to make its centrality and importance clear. Many people-going back to Plato and including the philosopher John Stuart Mill, the American labor leader Samuel Gompers, and novelist Joseph Heller have seen the logic in a specific context, such as theories of social order, union organizing as seen by a theorist and a practitioner, and heroic participation in battle as seen by a novelist. Economists referred to the logic as the “freerider problem,” but generally did not go on to elaborate its extremely broad application and importance. Olson’s impact in political science was massive. He essentially put an end to traditional group theory, in which it is commonly supposed that the political influence of a group is virtually a linear function of the number of people or voters in the group. In essence, the traditional view is a fallacy of composition: This theory falsely supposed that if people share an interest they will jointly act for it.

This vision of the power of groups reigned from Arthur Bentley to David Bicknell Truman. Many scholars, such as Elmer Eric Schattschneider, argued against the standard view by showing that it did not apply in important cases—the common tack of social scientists who do not have a general theory. Olson provided a general theory and laid the argument of linear power to rest. It remains true that in electoral processes numbers count, but Olson’s logic suggests that the organization of voters actually to cast ballots and to vote intelligently remains a problem for the linearity thesis even in elections.

Olson moved fully into political economy in The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities(1982), in which he advanced explanations of political obstacles to economic development, obstacles that can be seen from the perspective of his earlier arguments on collective action. His provocative conclusion is that war, as in World War II, can destroy groups that pose barriers to good economic policies, and can therefore make subsequent development easier and quicker. Olson argued that it can be better to lose a war than to win it, because the winners, such as the United Kingdom, face peace with political barriers to economic development.

Olson’s third major project, Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships(2000), is the study of the rise of particular kinds of political regimes, and especially of authoritarian regimes that commonly seize power and then attempt to use it to carry out specific programs or merely to enrich the authoritarian leaders. As many traditional political philosophers do, Olson started from an assumption of anarchic organization of a society and then attempted to explain the slow rise of an order that is hierarchical. In both cases he saw potential leaders as bandits. To simplify, he supposed that first there are roving bandits who merely enrich themselves through plunder, killing the golden goose and moving on. Then there are stationary bandits, who are the core of an incipient state. The latter see that there are far greater gains to be made from organizing the society into a productive order that benefits citizens as well as the leaders. There is mutual advantage in stable organization.

This is perhaps strangely similar to the central move of John Rawls’s theory of justice (1971). Rawls supposed that a regime of strict equality would suppress incentives to be productive and would therefore not benefit even the worst-off members of the society. The poor could prosper better if many others were unequally rewarded, to induce greater productivity that could be shared with the poorest. Olson recognized that a stable regime that lets producers benefit directly from their own productivity will produce great surpluses that the bandit regime can partially tax away to benefit themselves or their programmatic aims.

Much of the importance of Olson’s work is that it crosses disciplinary boundaries. This had a professional cost for Olson because his reputation was split across these disciplines, from economics to political science, sociology, and even history, philosophy, and psychology. In the restrictive academic environment, which encourages division into somewhat narrow disciplines, an Olson seems less central than he actually was. He helped to bring these disciplines together, but, sadly, any great success in meeting this challenge lies still in the future.

Olson was a wonderfully witty person whose presentations at conferences and in the classroom elicited laughter and provided great enjoyment. He was generous to his intellectual challengers and he carefully addressed their arguments, often taking them apart with clever examples and arguments that persuaded. At times, he was the consummate performer, with a great range of physical and facial gestures that enlivened his talk. He died too young of a sudden heart attack after what participants have described as a typical lunch conversation that ranged widely over many issues. His marriage to Alison O. Olson produced a daughter and two sons.

BIBLIOGRAPHY

WORKS BY OLSON

The Logic of Collective Action. Cambridge, MA: Harvard University Press, 1965.

The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven, CT: Yale University Press, 1982.

Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships. Oxford, U.K.: Oxford University Press, 2000.

OTHER SOURCES

Bentley, Arthur F. The Process of Government. Chicago: University of Chicago Press, 1908.

Gompers, Samuel. “Discussion at Rochester, N.Y., on the Open Shop—‘The Union Shop Is Right’—It Naturally Follows Organization.” American Federationist 12 (4, 1905): 221–223.

Mill, John Stuart. Principles of Political Economy. In John Stuart Mill: A Selection of His Works, 7th edition, Vol. 2 and 3, edited by John M. Robson. Toronto: University of Toronto Press, 1966.

Rawls, John. A Theory of Justice. Cambridge, MA: Harvard University Press, 1971.

Samuelson, Paul A. “The Pure Theory of Public Expenditure.” Review of Economics and Statistics 36, no. 4 (1954): 387–389.

Schattschneider, E. E. The Semi-Sovereign People. New York: Holt, Rinehart, and Winston, 1960.

Truman, David B. The Governmental Process: Political Interests and Public Opinion, 2nd ed. New York: Knopf, 1971.

Russell Hardin