Does Self-Interest Define an Individual?

This NY times article published in February 2008 tries to explain what human motives define individual’s behavior while participating in a collective action. The author Robert H. Frank starts his discussion with the assumption that most people are rational actors who even when involved in a collective action prefer their own benefits to the benefits to the organization they happen to be in and are “self interested in the narrow sense”. According to the author (and as we discussed in class) this approach stems from the free rider problem introduced by Mancur Olson in his classic book, “The Logic of Collective Action”:

The problem, as described by Mancur Olson in his classic book, “The Logic of Collective Action,” is that even those who share a presidential candidate’s policy goals will reap no significant material advantage by donating their time or money… Nor can any individual volunteer — even one whose efforts resulted in hundreds of additional votes for his candidate — realistically hope to tip an election.

Even though large numbers of donors and volunteers contradict this rational economic theory and expectations of the free rider problem at first glance (for example, the presidential campaign of Barack Obama raised over $32 million from more than 250,000 individual donors and sent huge numbers of volunteers into the field), “By-Product” and “Special Interest” can easily explain these dynamics. According to these theories introduced by Olson in chapter 6 of "The Logic of Collective Action", a political organization can mobilize political activity because of some other nonpolitical function it performs that induces individuals to participate and hence get resources needed to support the activity which turns the political activity of an organization into a by-product. For instance, by becoming involved in campaigns, volunteers benefit in many ways as “They often meet interesting people, for example, or they may learn about attractive employment opportunities. Major donors, for their part, are often rewarded with ambassadorships or other prominent positions when their candidate wins”. In this case changing the current political situation in the country is not what attracts people to this activity.

However what about bazillion of other small donations that people make clearly not because of their self-interest but because they find satisfaction in the act of contributing to collective good? This article uses the approach of Albert Hirschman to address this issue. He acknowledges that self-interest is the most important motive in some periods but many people begin to feel displeasured when they continue to acquire material goods. When consumption standards go up, people have to work harder to hold their place; as people become more stressed and, eventually, when the tipping point is reached, they assign less value to the private consumption and devote more energy to collective goals ceasing the free rider problem. However, after some years as more and more people dedicate their lives to the virtue of collective action, the praiseworthy of volunteering falters and people resume to accumulate private goods and the cycle repeats… Even though this might be not the right approach to contradict the theories based on the rational self-interest of an individual, this article brings up an interesting point that even though self-interest is often a very important motive it is never the only important motive and that in some moments in history “narrow self-interest models miss the essential story line completely”.