Freedom, Society, and State - Ludwig von Mises Institute

government is as simple as it is persuasive. If payments
for the collective good were voluntary the rational
individual will, quite naturally, cease payment,
since he would continue to receive the benefits of the
good or service irrespective of his individual contribution.
But since everyone will reason in the same
fashion, no one will pay and the collective good, which
everyone presumably des ires -- and in fact considers
essential -- will not be provided to anyone. National
defense is a good example. If·Jones were to purchase
pro t e c t i· 0 n f r om a n u c I ear at tack , then his next door
neighbor, Smith, will receive simultaneous protection,
regardless of his payment, and vice versa. It is impossible
to defend one without likewise defending the
other. Thus, Jones would leave payment up to Smith and
Smi th would leave it up to Jones. The result is that
neither would pay, and thus, the "collective good" of
nat ional defense, which both desire, would be supplied
to neither. Therefore in the area of collective goods,
rational action leads to irrational results.
Now it is certainly conceivable, especially in a
very simplified two-person interface situation like
that above, that Jones and Smith could arrive at some
comprom i seag r e em entin wh i c h bo t h wo u Idshare a po r ­
tion of the cost. But such agreements become progressively
more difficult, and thus costly, the greater the
number of people involved, so that while providing
the s ego 0 d son the rna r ke t rn i gh t . bethe 0 ret i c a I I Y conc
e i v a b Ie, i tis p ragmat i c a I I Y i rn p0 s sibIe. As Go r don
Tullock points out:
In many cases the bargaining costs are so
h i g h t hat i nor din a r y s pee c h we wo uIdsa y
that bargains were impossible. We turn,
therefore, to some type of collective
decision-making process; that is, some
arrangement under which individuals are
compelled to carry out the wishes of others.
Thus we finally come to the role of the
state, and this role superficially appears to
be a very modest one -- that of reducing the
costs of bargaining.(40)
In short, certain goods and services, like national
defense, police and court services, pollution control,
education, roads, parks and the like, are thought
to be both (a) essential and (b) collective, or at
least "quasi-collective." It is therefore argued that
the y can not be sup P lie d wit h 0 u t some deg r e e 0 f coe r-
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