Posted by: Dirk | June 18, 2009

The logic of collective action

Mancur Olson(‘s) is one of two nobel prize winners in economics in 1979, and his major work (1965) makes an interesting read when thinking about the financial sector. James Buchanan writes about him and his work:

How can the rise and decline of nations be explained? Anyone who seeks an answer will necessarily encounter Olson’s thesis on the critical importance of institutional structure, as imbedded in history—a thesis that is, itself, informed by the logic of collective action. Mancur Olson had a rare ability to take highly abstract but ultimately simple ideas and to apply these ideas to the reality of economic and political development.

Reforming the financial markets might not be about free markets or efficiency, but about how to deal with too powerful institutions that have hijacked our wealth. This book provides some theoretical ideas of what too big to fail means and how we got to where we are.

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Responses

  1. Mancur Olson never won a Nobel Prize.

    Quoting from:

    http://www.accessmylibrary.com/coms2/summary_0286-680737_ITM

    Review Article: The Divided Legacy of Mancur Olson.

    Soon after Mancur Olson died in February 1998, The Economist said aloud what many in academe had been muttering for years:

    Had he lived, his theory of collective action might well have won him a Nobel prize in economics, though not a wholly uncontroversial one. Some economists viewed him as a one-idea thinker, and worse, they whispered, his idea had reverberated less loudly within economics than outside of it; for example, in political science. The charge would not have troubled Mr Olson for a moment. He was as disdainful of parochialism in the life of the mind as in the life of a nation.

  2. […] by Christopher Whalen I have suggested recently that Mancur Olson’s logic of collective actions could be used to describe the behaviour of […]


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