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Dr Marsh on Olson: A Comment

Published online by Cambridge University Press:  27 January 2009

J. R. Shackleton
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Extract

In a recent article (‘On Joining Interest Groups: An Empirical Consideration of the Works of Mancur Olson Jr.’, this Journal, VI (1976), 257–72), David Marsh has attempted to test Mancur Olson's hypotheses concerning the rationale for individual or corporate membership of interest groups by using data from a study of the Confederation of British Industry. It is the purpose of this Note to defend Professor Olson's broad theoretical approach from some of Dr Marsh's criticisms. Olson applies the insights of established economic analysis to political theory; it is not his methodology which represents an innovation, but rather the use to which it is put. A defence of Olson's approach is, then, of necessity to some extent a more general defence of economic analysis.

Type
Notes and Comments
Information
British Journal of Political Science , Volume 8 , Issue 3 , July 1978 , pp. 375 - 380
Copyright
Copyright © Cambridge University Press 1978

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References

1 Olson, Mancur Jr., The Logic of Collective Action (Cambridge, Mass.: Harvard University Press, 1971).Google Scholar

2 Grant, W. and Marsh, D., The Confederation of British Industry (London: Hodder and Stoughton, 1977).Google Scholar

3 Brian Barry has pointed out that applying economic concepts to political questions is not at all a new procedure, but one which has been curiously neglected for much of this century. See Barry, Brian M., Sociologists, Economists and Democracy (London: Collier–Macmillan, 1970).Google Scholar

4 The nature and extent of CBI influence in government is discussed in Grant, and Marsh, , The Confederation of British IndustryGoogle Scholar, especially Chaps. 7 to 10.

5 Olson's definition is close to the well-established ‘public good’ of economic analysis, with the distinction being that ‘collective goods’ benefit only a particular section of society. Like public goods they are ‘non-rival’ (i.e. one member's enjoyment of the good does not detract from that of another member of the collectivity) and ‘non-excludable’ (eligible members of the group enjoy the benefits of the good whether or not they have actually contributed to its production).

6 See Friedman, Milton, ‘The Methodology of Positive Economies’ in his Essays in Positive Economics (Chicago: University of Chicago Press, 1953).Google Scholar

7 To be fair to Marsh, the concept is introduced in Olson's work, though it is doubtful whether he would appreciate its use in this context. The criticism in this note therefore also applies to Olson, whose use of this concept seems uncharacteristically sloppy. See Olson, , The Logic of Collective Action, p. 164.Google Scholar

8 Another possible non-monetary selective benefit would arise from the existence of altruistic or quasi-altruistic motivation on the part of decision makers. Contrary to popular belief, such a possibility is neither outside the compass of economic theory nor need involve a descent into tautology. However Olson, Barry and an anonymous referee of this journal seem to consider that such motivation undermines the usefulness of the notion of economic rationality so the matter will not be pursued further inthis paper. The interested reader might consult Collard, D., The Economics of Altruism (London: Martin Robertson, 1977).Google Scholar

9 Grant and Marsh do admit that the increase in membership fees in 1973 led to a fall in CBI membership, but are curiously coy about the extent of this fall. (See Grant, and Marsh, , The Confederation of British Industry, p. 37.)Google Scholar A further straw in the wind might be the observation that in the past British employers' organizations facing a membership crisis have often responded by devoting more resources to the provision of services to members.

10 One might look at such factors as the frequency of contact between businessmen in the relevant populations, the degree of competition in particular markets and the distinction between owner-controlled and ‘managerial’ firms.

11 Ireland, T. and Johnson, D. B., The Economics of Charity (Chicago: Public Choice Society, 1970).Google Scholar

12 He also neglects to mention the light Olson's approach casts on the history of the CBI: in particular its development as a federation of smaller organizations and the role played by the government in bringing it into being. These are entirely predictable consequences of the difficulties of organizing collective action which Olson was among the first to analyse systematically.