Have you ever worked in a group for a school project? If so, then you definitely know the importance of working together as a group to reach a common goal. The group's goal, of course, is to get a good grade on the project! However, what if I told you that this experience you had parallels an economic concept known as collective action? Want to learn more about this concept? Read on!
Collective Action Definition
What is the definition of collective action? Collective action occurs when people work together as a group to achieve a common goal. What does collective action look like? Let's take a look at a brief example:
Let's say you and your coworkers are unhappy with the working conditions of your job. You are all treated poorly with low pay. Therefore, you and your coworkers try to mobilize the workplace to demand better working conditions and higher pay.
In the example above, the collective is the workers trying to mobilize, and the goal is obtaining better working conditions and higher pay. This is the essence of collective action! But what does it mean for collective action to be successful?
For collective action to be successful, groups should be relatively small and well-organized to prevent any issues within the group. The larger the group and the more disorganized it becomes, the less likely it is to obtain the goals the group desires. Therefore, it is not enough to form a group and have a great cause; the group must have a strong foundation.
Collective action in economics can be seen in the form of public goods. The taxpayers pay their taxes with the goal of receiving goods and services, such as better roads. However, taxpayers are a large group who are not deliberately organizing to pay their taxes; as such, this can result in people who do not pay their taxes in the collective.
Collective action occurs when people work together as a group to achieve a common goal.
Importance of Collective Action
What is the importance of collective action? Collective action is important because it can engender change that would not be possible if it were done by an individual. What do we mean by this? Let's take a closer look.
Recall that collective action will happen when people work together to reach some goal. Think about some groups or organizations that we may consider as collective action. You may think of interest groups like the AARP, or maybe a labor union like The National Education Association. Regardless of what comes to mind, think about how difficult their goals would be if the organization consisted of one person!
In the AARP's case, fighting for the rights of individuals over the age of 50 will be difficult for just one person. However, if there is a group that's willing to organize and fight for this cause, then the chances of success are higher. Of course, there needs to be a middle ground in group size, but certainly, any group size will be more effective than one individual.
This is the importance of collective action. Goals that are achievable in a group setting may be too difficult, or even impossible to achieve if it were just one person. Collective action gives a voice to many people to fight for goals that are important to them.
Collective Action Examples
What are examples of collective action? First, let's recall that collective action occurs when people work together as a group to achieve a common goal. From this definition alone, you are probably getting some ideas of where you may see collective action. Let's discuss a few here in detail.
Collective Action Examples: Interest Groups
Interest groups are an example of collective action. Interest groups are organizations that have an agenda they want to advance. In the United States, there are many interest groups that are fighting to get their agendas passed.
The National Rifle Association (NRA) and the American Association of Retired Persons (AARP) are interest groups in the United States.
The NRA fights for gun rights and aims to teach people about gun safety in the United States. The NRA is a large interest group that lobbies Congress to uphold its stance on gun rights. In contrast, the AARP fights for the rights of individuals over the age of 50. The AARP will fight for things such as updating Social Security and implementing more robust retirement programs. Like the NRA, the AARP also lobbies Congress to implement policies that are in line with their organization.
Interest groups are organizations that have an agenda they want to advance.
Collective Action Examples: Unions
Unions are another example of collective action. Generally, workers form unions in their workplace when they are unhappy with their working conditions. Perhaps there are long hours, scant pay, and dangerous conditions that are leaving people unhappy. This could lead to workers organizing collectively to fight for better working conditions — unionization.
The National Education Association and United Food and Workers Association are labor unions in the United States.
The National Education Association fights for better working conditions for public school employees. This may include teachers, bus drivers, cafeteria workers, etc. The United Food and Workers Association fights for better working conditions for retail store employees and distribution employees. This could include hospitality workers and food manufacturing workers.
Fig. 1 - United States Labor Union Approval Rating1
The graph above shows the recent United States labor union approval rating. As we can see, the approval rating for labor unions has increased in the past decade. In fact, 2022 saw the highest approval rating for labor unions in the United States since 1965.1
Collective Action Problem
What is the collective action problem? The collective action problem states that group work with other individuals is difficult, given that conflicting interests discourage cooperation. Why is this the case? Let's take a look at a basic example to see how the collective action problem may play out:
For example, let's say that Mike, Jake, Sally, and Sarah are all working together on a group project for school. Sally knows that Mike, Jake, and Sarah are all hard workers who will take on most of the work. Therefore, Sally hardly does any work since she knows the work will get done anyway, and she will receive a good grade.
It seems like a good idea on Sally's part, right? Well, here is where the collective action problem can come to fruition. Sarah knows of Sally's plan and is now planning to abandon her part of the work as well. This now leaves Mike and Jake to complete a group project with only half of the team! They are now likely to receive a poor grade on this project.
As you can see from the example above, a collective action problem engenders when certain people in a group decide to pursue other interests.
The collective action problem can be mitigated if the group is smaller. In the example above, the size of the group was kept small for clarity; however, collective action problems generally encompass a greater number of people.
The collective action problem states that group work with other individuals is difficult because conflicting interests discourage cooperation.
What are the barriers to collective action? The main two barriers to collective action are large group sizes and disorganization. One or both of these can cause the free-rider problem. The free-rider problem occurs when people who benefit from a good use it and do not pay for it. Let's go over a brief example of a free-rider problem to further our understanding.
As you can see, the free-rider problem can occur when people benefit from a good they don't pay for.
As you can see from both examples, collective action problems can engender from large group sizes and disorganization, which then can cause the free-rider problem. However, collective action can be successful and avoid the free-rider problem if the group size is kept small and the group is organized.
The free-rider problem occurs when people who benefit from a good use it and do not pay for it.
Further your understanding of the free-rider problem with this article:
- Free Rider Problem
- Rent Seeking
Barriers to Collective Action
What are some barriers to collective action? Let's find out through an example!
Let's say that your local library is funded through property taxes from those that live in the area. This means that the people who are paying for the library are those who live in proximity to the library. However, recently people from out of town have been using this library because it has the widest selection of books. Here, the free-riders are those who do not live in proximity to the library and are not paying property taxes to fund the library.
Now that we have an understanding of the free-rider problem, we can begin to see how small group sizes and better group organization can prevent the free-rider problem. Let's use the same example of the local library that is paid for through property taxes.
Your local library is funded by property taxes from those that live in proximity to the library. However, you live in a small town where everyone knows each other. In addition, your library is run efficiently and has a database with every resident that moves in or out of the town. In this way, the library will always know who lives in the area and who does not live in the area.
In the example above, the town that pays for the local library is much smaller, and the library has an efficient method to determine who pays property taxes and who does not pay property taxes. Now, the library has the opportunity to turn away anyone who does not live in the area since they do not pay property taxes.
Collective Action - Key takeaways
- Collective action occurs when people work together as a group to achieve a common goal.
- Examples of collective action are labor unions and interest groups.
- Barriers to collective action include large group sizes and disorganization.
- The free-rider problem may occur if barriers to collective action are present.
- The collective action problem states that group work with other individuals is difficult given that conflicting interests discourage cooperation.
References
- Justin McCarthy, U.S. Approval of Labor Unions at Highest Point Since 1965, https://news.gallup.com/poll/398303/approval-labor-unions-highest-point-1965.aspx
Explanations 
Exams 
Magazine 
