Given my frequent reference to collective action problems (and time horizon problems), along with the endemic levels-of-analysis error committed by right-wing ideologues who insist that individual volition (as opposed to social contracts) should be relied on to produce all public goods, I thought it would be a good idea to have one post to refer to which explains them and their relevance simply and clearly.
Collective action problems are those situations in which a group of people have some public good which they can produce together, or which they must maintain together. Each individual contribution to its production or maintenance costs only the individual making it, but benefits every member of the relevant public. It is often the case that by a strictly self-interested individual calculation, the costs to the individual of contributing to the public good outweigh the benefits to that individual, though the benefits to the group (and thus to all individuals in it) outweigh the costs to the group (and thus to all individuals in it). (Put another way, the total benefits of each contribution outweigh the total costs, but since the individual bears the entire cost and receives only a fraction of the benefit, the costs to the contributor of contributing outweigh the benefits to the contributor).
The classic mathematical formulation of the problem is “the prisoners dilemma” (http://en.wikipedia.org/wiki/Prisoner’s_dilemma). In short, the scenario involves two partners in crime arrested and held in separate interrogation rooms. Each is offered a deal if he turns in the other. Since neither knows what the other will do, they each have to ask themselves what is the best choice for each possibility. If A doesn’t turn B in, then it is in B’s best interest to turn A in, and if A does turn B in, it is still in B’s best interest to turn A in. According to rational self-interest, B’s most logical choice is to turn A in. A faces exactly the same logic. They both turn each other in. But, if they had been able to coordinate their choice, and commit one another to it, they would have both been better off not turning one another in.
There are other classic formulations as well, such as Garrett Hardin’s “Tragedy of the Commons” (http://en.wikipedia.org/wiki/Tragedy_of_the_commons), and ”the free rider problem” (http://en.wikipedia.org/wiki/Free_rider_problem).
When I was a high school social studies teacher, I taught my students about collective action problems using the following exercise: Using “classroom currency points” (ccps), I made the following offer to my thirty-or-so students: For each that chooses to pay me 10 ccps, I will give each and every person in the group 1 ccp, regardless of whether they chose to pay the 10 ccps or not. To avoid discussing any complexities at this point, let’s say that the decision is made in secret, no member of the group ever knows what any other individual member chose to do, and all members agree that their only goal in this exercise is to maximize their own individual wealth (the latter being, in practice, what students did). If each individual acts in his or her own rational self-interest, since there is a net cost of 9 ccps to accepting the offer (pay ten and get one back in return, along with everyone else), no one would choose to do so. However, if everyone does accept it, each person is made 20 ccps richer (pay 10, and get one back for each of the 30 students who paid). No matter how many people accept or reject the offer, those who chose not to take it will always be better off than those who chose to take it. In other words, rationally doing what best maximizes one’s own individual wealth (in this scenario) leads to an outcome in which everyone does worse than they would have done had they been able to enforce a cooperative agreement.
Even adding in some of the complexities I left out, communication without any mutually enforceable commitment mechanism doesn’t solve the problem, since each can assure the others that he or she will cooperate but then not actually do so, benefiting from others’ cooperation while not contributing him-or-herself as a result. Some enforcement mechanisms are informal, such as the loss of respect and reciprocal goodwill if non-cooperation is found out; and some are internalized, in the form of values and beliefs in which one feels shame at neglecting to do “the right thing,” and pride at doing the right thing. These are all aspects of the human and social institutional landscape, and all relevant factors in a complete analysis.
Returning to the basic model, it is not hypocritical, for instance, for someone to both support a higher carbon tax and yet not unilaterally pay to the government the amount they think it should be (though calling it “hypocritical” can act as an informal enforcement mechanism in some situations). The carbon tax is based on the calculation that we are all better off in the long run by paying it (and by having our carbon emissions affected by having to pay it), but the choice not to do so unilaterally is based on the calculation that the costs are borne by that individual only, in exchange for a very slight marginal decrease in carbon emissions. Even simply “driving less” faces the same logic: it inconveniences the individual, but does not fundamentally address the problem that is a function of widespread rather than isolated individual behaviors.
The lack of recognition of the difference between advocating for a social policy which incentivizes people to act in a certain way, and choosing to unilaterally act in that way, is an example of a “levels of analysis error,” analyzing social issues as if they can best be understood on the individual level of analysis. This error permeates Libertarian/Tea Party ideology, which doesn’t recognize the existence of public goods, and therefore of collective action problems.
Time horizon problems are similar to, and interactive with, collective action problems. A time horizon problem involves the fact that we quite reasonably value that which will be enjoyed or suffered closer to the present than that which will be enjoyed or suffered farther in the future. One psychological reason is that we cannot be certain that we will survive into that future, so delaying gratification risks never enjoying it, in proportion to how far into the future it is postponed, while delaying something unpleasant means possibly never having to suffer it, in proportion to how far into the future it is postponed. More generally, the present is visceral and certain, while the future is abstract and uncertain. This is why children have to learn to delay gratification, and most adults never get as good at it as would behoove them to be (though some overshoot the mark).
Collective action problems and time horizon problems combine in many instances to create a mutually reinforcing obstacle to widespread cooperation for mutual benefit. The classic example is global warming. Global warming is a global phenomenon, with every emission of Greenhouse Gases (GHGs) affecting the whole world equally (in regards to global warming), but the costs borne by each individual, corporation, and nation that engages in GHG emissions reduction. Compounding this massive, multilevel collective action problem is the time horizon problem: The costs of abatement are in the present, while the benefits lie in the future. Uncertainty plays into these obstacles: Convenient distrust of the overwhelming scholarship demonstrating the reality of the problem is easily mobilized in service to not confronting this combined collective action/time horizon problem.
In the real world, collective action and time horizon problems are nested and overlapping, across levels and among various swathes of shared interests, group identities, or social institutional entities. And the ways in which human minds work, embracing frames and narratives rather than, for the most part, the most rational arguments utilizing the most reliable data, combined with our capacities for empathy and selflessness, complicate the systemic dynamics involved further, creating, along with the multilevel and multisector nature of collective action and time horizon problem, both more complexity in the challenges being confronted, and more opportunity for resolution.
Both biological and cultural evolution are driven, to a large extent, by the combination of collective action and time horizon problems (more the former than the latter). As Economist Robert Frank argues in his book Passions Within Reason, emotions evolved in a certain branch of the animal kingdom in order to facilitate cooperation: The costs of angering others, and benefits of earning their heartfelt gratitude incentivize acting cooperatively. However, genetic and memetic selection occur at the individual level, so incentives to cheat also exist. (Cognitive Scientist George Lakoff, in his book The Political Mind, describes how the mind is “hard-wired,” so to speak, with a capacity for empathy, illustrating the neurological correlary to Frank’s thesis).
Social institutions arise and evolve primarily to augment and improve upon this haphazard function of emotions, with contracts and laws and taking the place of trust, and enforcement by the state taking the place of private retaliation. Four distinct modalities combine in various ways in particular social institution to better align individual to collective (and immediate to long-term) interests: Hierarchies, markets, norms, and ideologies. Hierarchies are systems of legitimate authority relying on formally codified and enforced rules. Markets are decentralized systems of multilateral exchange, usually facilitated by some form of currency. Norms are informal rules mutually enforced through decentralized social approval and disapproval. And ideologies are internalized beliefs and values enforced through self-policing and auto-sanctioned by cognitive dissonance (in the form of self-inflicted feelings of guilt or shame). Individual social institutions generally are comprised of some or all of these modalities, usually in combination, developing interdependently both within and across individual social institutions.
A great deal of theory and research, within a great many different disciplines and paradigms, has explicitly and implicitly been devoted to these dynamics. The complexity involved is, of course, far more extensive than I have indicated in this brief overview. But understanding the basics described in this post should be a requisite part of every human education, for it informs the nature of the challenges we face, and of the solutions available, in essential ways.
(See also The Mathematics of Conflict and Cooperation, for more elaboration of this model.)