Free riders are people who benefit from things paid for by others. Statists use free riders as an excuse to initiate force. But this makes no sense. Please consider…
Every person who receives a tax-funded handout is a free rider. They are receiving benefits that were paid for by others. So how can The State be the cure for a supposed problem of which it is the greatest example. This contradiction doesn’t stop statists from arguing that certain goods may not be provided unless everyone is forced to pay for them. But there are many examples to disprove this, including…
- Volunteer activities
- Free Internet services
- Private fireworks displays
In reality, people create things they value, even when they can’t persuade everyone who benefits to pay for them. Statists counter-argue that funding will be insufficient in some cases, but…
- The amount of something a society needs is always a matter of personal opinion. So…
- The “insufficiency” argument is just another example of statists trying to impose their personal preferences on other people
Libertarians view free riders as a sign of an affluent, generous, empathetic society, not as an excuse for state aggression.
Libertarians believe governments must obey the Zero Aggression Principle. Governments must not initiate force. They must only use force defensively.
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The problem is a managed fractional reserve monetary system which intentionally causes scarcity. Until this is addressed there will be no solution.
I’m taking a political science course and the subject of unions came up. Something similar to this “free-rider” justification came up. That people should be forced to join and pay for unions, because they benefit from the union’s government actions. I’m enjoying these levers, they’re helping me anchor my mind to the libertarian standards I already know to be true, but could someone help me further understand this concept? How would I articulate an argument against forced union membership?
Hi SKT. Here’s an irony in the history of unions. It was the big companies that lobbied for legislation that would create closed shops. They did this because they did not want to negotiate multiple contracts with multiple employees and/or multiple unions. It was easier for them to have the government force everyone into one union. I think you could find useful articles about this subject at the Foundation for Economic Education. So I don’t think, historically, that the free rider problem was the justification for creating closed shops.
Morally, it seems strange to assert that benefiting others can provide a justification for harming others. This is essentially what the free rider argument asserts.
Expanding on Perry’s answer about unions: The closed shop, in which a single union represents all the workers of one (or more) companies, provides a loophole in the Sherman Act, the 1894 law prohibiting monopolies. Under the Sherman Act, it is a crime for owners of competing companies, to agree with each other about how much to charge customers. The crime, “price-fixing”, got prohibited because executives could conceal profits as expenses and enrich themselves at customers’ expense, if they picked the selling price.
Closed-shop laws enable competing companies to negotiate deals for labor, from a single union, and to publish the price they pay for labor. This allows execs to guess at what the competition earns on the products they sell.
Thus, union propagandists cooked up the free-rider argument, to explain to their members, why so little democracy exists within the unions. The actual purpose, however, is something entirely different.
SKT – forced union membership is an interesting topic. I myself had been anti-union for the better part of 35+ years. Then I lost my sales job. Eventually I wound up working for FirstStudent as a school bus driver making $11.70 an hour (which was the union negotiated start wage). We had many arguments both for an against the union where I worked. But instead of relying on others opinion I joined and was a quick study. Eventually I wound up on the negotiation team for the next contract. A fascinating experience. Here is what I learned:
1. Big Business does not give 2-shoots about the individual worker. You are merely a cell in the matrix.
2. Every dime they pay you is one less dime. And they CARE VERY MUCH about dimes – trust me.
3. As an individual you are the little person -you are an ant for all intents and purposes.
So what is an anti-union person to do? Attempt to discuss your wage outside the union? In a union place of biz this is not even possible. Ply you wares elsewhere? Dumb argument if you end up as a school bus driver (like I did) you’re most likely out of options (like I was).
Just remember that a union is above all a “choice” by the individual “worker” to partner with “other workers” similarly situated and bargain for better wages and/or working conditions as a group. Its not a hard concept and one that I think righties and even Libertarians should be better versed in. As an “Ant” you can say all you like about doing a good job, etc. But if they no longer like you for whatever reason you’re gone. And you can say “I’ll just go get another job” but it doesn’t always work like that. And once past 40 there is always someone younger, faster, better looking, etc. that employers will look at more favorably and whom they can likely pay less.
So in short it’s easy when you’re 30 to say to me I should have done x or y and it would have worked out different. And you may be correct.
But in the end I think we had better keep in mind that unless you OWN your own business and are planning to only work for yourself your entire life you need others to survive in our current world.
Mike: Unions care about the wages and working conditions of their members (from whom they extract dues) at the expense of all other workers — that’s why unions demand closed shops.
Unions are a prime example of coercion in the workplace, period. They never helped raise wages or improve conditions for anyone — only productivity increases can raise real wages, and we’ve had lots of those in the past 150 years, just at the time that unions claimed to be making progress for workers.
Free riders… that’s just an excuse. A poor excuse.
Kent, I advise that folks interested in this read your linked article. It’s quite brief.
Government creates free riders. Subsidies, welfare, protectionism, even highways produce free riding.
Much of what government does creates free riders…at the expense of those who labor to create value (and their dependents).
Government doesn’t alleviate the problem, government exacerbates it.
You are quite right Sam. I had intended to include this point in the Lever. Thanks for pointing this out. I will correct the problem.
Free rider arguments are ever-present in the justifications for socialized medicine.
“They went to the E.R., and now we all are going to pay for it…..” What a disaster. American medicine is circling the drain. Quality doctors with principle don’t want to work for Uncle Sap.
You are so right celticreeler.
I strongly disagree that “The amount of something a society needs is always a matter of personal opinion.” The amount of something a society needs is a question in game theory and mechanism design. The most general solution, the Vickrey-Clarke-Groves mechanism, incentivizes everyone to reveal their true preferences, and compensates those who are left worse-off by the actual decision. But it does require a strong, centralized decision-maker with the capability of taxation.
Even if you weaken the constraints to where you’re just asking agents to pitch in and help on some group effort, the Shapley Value for fair compensation is hard to reach in a distributed manner.
Hi Steve. Thanks for your comment. You seem to be suggesting that some obscure concept from game theory can objectively decide how much of “something” society needs. You claim that this theory requires a strong centralized decision maker. Such decision makers are necessarily subject to difficulties of their own, that have a hint of game theory about them. For instance…
There is the problem of concentrated benefits and dispersed costs. Those who receive tax-funded favors have a strong incentive to defend those favors, while the costs are spread among all taxpayers, such that no one taxpayer has much incentive to fight against any particular favor. This creates a built-in bias in favor of cronyism. There is no way to cure this problem as long as government is funded through violence-based taxation. The only cure is to make government subservient to consumer sovereignty. You do that by using voluntary funding. This creates what we call consumer controlled government. That brings us full circle — the amount of “something” a society needs is determined by what people are willing to pay for, voluntarily, without a strong centralized decision maker.
This is not a clear statement of the “lever”. In the second sentance, what does “may not” mean? Might not, could not, shall not, must not, will not, … Please clarify, especially in the context of a commonwealth.
Might not, as in, if not everyone paid into Social Security, the program would go broke. Likewise welfare, military defense, product safety, even police and fire departments, along with almost everything else the State operates. Money must be taken forcibly, because otherwise some will attempt to benefit without paying their “fair share.”
Hi Thomas. It’s not clear what the relevance of “commonwealth” is to your question. As for whether “may not” means “might not, could not, shall not, will not,” I think you would find, among the various people who worry about the “free rider problem,” someone to advocate for each of those terms. Thus, to my mind, the equivocal term “may not,” or “might not” could stand in for the other possibilities
I’d like to hear your thoughts on the argument of negative externalities (situations where an action desirable to an individual causes harm to others, for example water pollution).
Pollution is trespass and should be treated as such by the legal system. However, due process has a cost, so people will be unlikely to bring court actions against instances of pollution that are low cost, or in which we all participate because the benefit outweighs the harm. In addition, everything The State does is a negative externality, so The State cannot be viewed as a solution to the problem. Rather, it is a magnification thereof.
Frankly, you nailed this , especially on the issue of the environment. If anyone remembers the EPA’s bungling of the mining areas of the Animas River near Durango, Colorado, you know exactly what Perry is talking about. Will the EPA be required to compensate any of the ones harmed, including the states of Colorado and New Mexico, the Navajo tribe, or the property owners down the river for the damage done to their property? Not Likely . Instead they use some statist argument, such as sovereign immunity, to weasel out of restoration.
Everyone is benefiting from the thinking, creating, invention done by our ancestors. Therefore, we are all free riders. Who is hurt? Ideas stolen or given are still retained, not lost. Ideas make our existence possible and the more they are shared, the faster they grow.
WE ALL BENEFIT FROM COMMUNICATION AND ALL VOLUNTARY COOPERATION!
So by accident of birth we are all “free riders?” Is then political force/political government justified because of the benefits derived from stealing/taxing away the wealth of the workers?
“Free riding” is not “by accident” but the way our minds/societies work. We are stronger working together than each on his own. But it must be by consent not induced by guilt, or psychological tricks (manipulation).
When I help without being forced, I am rewarded for my choice. If I am forced, I am robbed.
Econ 101, price, supply and demand, i.e. the free market works. The consumer should not be compelled to buy any product, good, material, substance or service in “the land of the free and home of the brave.” Yes Dorothy, we are not in the land of obumma fantasy, make believe commie/socialist tyranny. Or are we? Given freedom to choose and to create and manufacture and provide, the private entrepreneurs will meet the needs of consumers. Remember Say’s Law: production creates its own demand (In short, Say’s Law is this: The supply (sale) of X creates the demand for (purchase of) Y.) However oversupply will not create more demand as the market of consumers will be exhausted. Demand cannot be compelled. Consumers cannot be forced to buy that which they don’t need unless a tyrant or tyrants come along, such as commie/socialist obumma and his cadres of commie/socialist Democrats and their “free health care” crooked scheme. We don’t need political government to tell us how to conduct our lives. Indeed, political government is not Christian and we would be wise to abandon it. I harbor no illusions; political government will not vanish in my remaining life.
Note: Unfortunately, Keynes failed to understand Say’s Law. By incorrectly stating it as “supply creates its own demand,” he proposed, in effect, that Say meant that everything produced is automatically bought. Hence, Say’s Law cannot explain the business cycle. ref: Say’s Law Is Back
Published in The Freeman: Ideas on Liberty – August 1999 by Mark Skousen Mark Skousen (http://www.mskousen.com; email@example.com) is an economist at Rollins College, Department of Economics, Winter Park, FL 32789, a Forbes columnist, and editor of Forecasts & Strategies.