Free Riders and Free Markets

Hell is other people. So is economics. Economics, therefore, is Hell. Every voter knows as much when, trapped in the maze of conjectural variation and strategic interaction where so much of the human drama is willy-nilly played out, he attempts to calculate his vote-value in the light of the darkness cast by the simultaneous attempt of each of his fellow-citizens to do likewise. His position, indicative as it is of the dilemmas and difficulties born of radical uncertainty and interdependent outcomes, is an uncomfortable one, but also, sadly, the standard case in a world not of kamikaze pilots, blood donors and Good Samaritans but rather of self-interested maximisers of benefit and minimisers of cost. David Hume knew as much when, trapped in the conventionalised conformity of a Calvinist Edinburgh never able fully to integrate the innovativeness of his individuality, he was able nonetheless to pen the following account of the paradox of individual choice. ‘Two neighbours may agree to drain a meadow, which they possess in common; because ‘tis easy for them to know each others mind; and each must perceive, that the immediate consequence of his failing in his part, is the abandoning of the whole project. But ‘tis very difficult, and indeed impossible, that a thousand persons should agree in any such action; it being difficult for them to concert so complicated a design, and still more difficult for them to execute it; while each seeks a pretext to free himself of the trouble and expense, and would lay the whole burden on others.’1