In this blog post, we take an in-depth look at whether sacrificing for the community is really a loss, through the lens of human nature’s pursuit of profit and the free rider problem.
We often hear that we must “live right” in life. Over the long period of time that humans have lived in communities, it has naturally been important to maintain cohesion within the group in order to preserve the community. This is because we can gain more benefits from life in an established community than we could have in our previous lives. Ultimately, in order to pursue individual interests, it became important to respect each member of the community, that is, to act altruistically. As a result, the phrase “you must live right” naturally became widely used. I also believe that it is important to maintain order within the community and live right for the ultimate benefit of the individual. And I believe that pursuing individual interests is the reason why we are living correctly today, and that it is no different from the reason why we must live correctly. As college students today, we often encounter situations that raise the question of whether we should live correctly, but I think that the problem of free riding in group assignments is by far one of the most frequently mentioned issues.
Let’s consider whether the reasons for living right and the reasons for living right can be applied to the simple example of free riding. “Free riding” is a concept in political economy mentioned by Olson in his 1965 book “The Theory of Collective Action.” In human society, individuals depend on the collective for their survival and the realization of their values in most cases.
For example, citizens depend on the state for the protection of their lives and property, and many workers depend on labor unions for the improvement of their working conditions. However, a collective does not necessarily have the will as a whole to optimize the utility of its individual members. In other words, an important problem with collective behavior is that there is interdependence among members, in which the contribution of one member determines the contribution of other members. In particular, when the property that the collective seeks to produce is a public good, individuals who seek only their own interests will free ride by enjoying the benefits of the public good without paying for it. For the same reason, free riding may also occur not only by individuals within a community but also by specific groups that constitute a subset of the community. If most members of the collective free ride, it will become impossible for the collective to produce sufficient public goods. If the production of public goods becomes impossible, restrictions on the use of public goods by individuals will eventually arise, causing harm to individuals. In order to prevent such a situation, efforts must be made to prevent free riding and to prevent free riders. Ultimately, we can see that the reason for living right, which is for the benefit of the individual, can be applied to the reason for not free riding. And we do not free ride in order to prevent such disastrous situations or to avoid suffering losses due to penalties imposed by measures to regulate free riding. In other words, the reason for living right also applies to the reason for not free riding.
Earlier, we thought that humans formed communities because they could enjoy greater benefits from community life. Based on this, I thought that the most effective way to prevent free riding would be to limit the benefits that can be enjoyed in community life when free riding occurs, thereby creating a situation in which losses are inevitable. So, what are some ways to create such a situation? There are two cases in which free riding can occur among members of a group: when the relationship between members is short-term and when there is long-term interaction. In the case of short-term interaction, the ultimate benefit to the group is lost before the individual gains the benefit, so the individual’s benefit from free riding may be greater in the end. Let’s consider these two cases separately.
Let’s first consider measures to resolve free riding in cases where there are short-term gains and losses. In the case of short-term exchanges, free riding can be prevented by imposing regulations on each exchange as it occurs. Considering this, when a single work is created as a result of a joint effort, one measure is to indicate the part of the work that each individual was responsible for so that it can be confirmed that no one has free ridden. In capitalist countries such as Korea, where individual efforts are directly reflected in individual compensation, indicating the amount of effort made by each individual will result in differences in treatment. As a result, people who are sensitive to differences in treatment will be prevented from free riding by a system that indicates individual efforts. The next measure is to consider imposing regulations and penalties on individuals who free ride. This measure has the limitation that it can only be effective if it is possible to confirm whether there was free riding in the course of joint activities, but if this limitation is overcome through the measures proposed above, it can be a much more powerful measure because it causes definite damage to individuals.
Next, let’s consider ways to prevent free riding among members who have long-term relationships. Since there will be multiple interactions, it is necessary to consider the possibility that previous interactions may influence future interactions. If an individual’s image or relationship with other members deteriorates, and the relationship between members is not one-time, it will inevitably cause damage to the individual. Good measures to prevent free riding using this method would be useful. First, there is the method of declaring a break in relations with the other group. A recent example of this is Donald Trump’s declaration of “America First” in response to the defense free riding argument, which effectively declared a new form of isolationism from other countries. Due to American firstism, countries such as Korea, which Donald Trump mentioned, will try to escape from the current situation and play their respective roles a little more, so this case can be an example of preventing free riding by groups. The next measure is to use the media to discredit the image of the free rider. In a situation where long-term relationships are maintained, each image is a factor to consider before starting new exchanges. When the fact that someone has free-riding is revealed, their image is tarnished, and they will be penalized when forming new relationships with others. Conversely, each individual will strive to avoid such damage, making this an effective measure.
The measures to prevent free-riding in the above two cases seem to be more effective in preventing free-riding by exploiting the profit-seeking nature of humans. However, the biggest limitation of measures to regulate free riding is that even if an individual suffers a loss due to the measures, if the loss is less than the benefit gained through free riding, or if the benefit gained by the individual after the measures are applied is ultimately no different from the initial situation, then measures to prevent free riding by individuals may be ineffective.
We have looked at the fragmentary aspects of a righteous life, such as not free riding. The reasons for living righteously and the pursuit of individual interests, which are the reasons for living righteously, can also be applied to the reasons for not free riding. We concluded that it is necessary to prevent free riding because it reduces the damage caused by free riding, and because the benefits to the community that result from preventing free riding ultimately return to the individual. Based on this, we considered measures to prevent free riding, such as imposing penalties directly on individuals, so that they cannot obtain the ultimate benefit. It would be desirable if the measures presented above to prevent free riding are actively utilized so that each individual can ultimately benefit.
