Insights from Mancur Olsen’s 1982 classic, 'The Rise and Decline of Nations,' on how interest groups derail advanced economies.
For all its supposed dynamism, the U.S. economy appeared slow and inflexible in the face of a once-in-a-generation crisis. Masks and ventilators were in short supply, but this inability to rapidly adjust wasn’t specific to Covid-19: America had long struggled to build housing, high-speed rail, and zero-emission sources of power, too. Andreessen’s critique crystallized something numerous scholars and commentators had been saying, and it had fans across the political spectrum.
on how we’d gotten here, however. Was it cultural malaise? Broken political institutions? Too much regulation? People seemed to agree that the U.S. had lost some essential dynamism, but couldn’t agree why.This week, Yale University Press is republishing an old book that claims to have the answer.
experts in economics and political science, who are contending with many of the same issues Olson grappled with.Harvard economist Edward Glaeser recalls his own long journey back to. Glaeser first read the book as a graduate student in 1993 and lightly dismissed it. While he found Olson’s logic sound, the writer’s preoccupation with the “stagflation” of the 1970s simply didn’t feel relevant to the boom times of post-Reagan America.
Olson was obsessed with the logic of interest groups. The main barrier to a group of people joining together to advance a common interest, he thought, was the free rider problem: Each member would prefer the group to exist but prefers not to personally invest time and money getting it started. Without some enforcement mechanism — like mandatory dues in a union — no one steps up because it’ll cost them a lot and they’ll gain just a little.