Free Rider Problem

1043 words - 5 pages

Intro Sample...

The Free Rider Problem

The free rider issue has become one of the most serious economic issues today. The free rider is a lazy type person who wants the benefits that others bring in without having to do the work. The free rider typically takes advantage of a public good. Living in a civilized society presents many opportunities for free riding, which we have yet to find a way to control. Economists regard the possibility for free riding as a problem for the free market, which usually leads to government intervention. Government intervention is not generally needed in a free market society but in this case if there were no government intervention this problem would not find a solution.

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Body Sample...

Though society as a whole may try to conserve a resource, the free rider can easily take advantage of this by not participating in the conservation effort. Those who believe in the concept of the free rider and the problems such people create might advocate government policy to require everyone to take part in efforts to improve the environment. Such people might contend that government action is the only fair and reliable way to prevent environmental problems. David Hume recognized the free-rider problem associated with public goods, even before the time of Adam Smith's writings. Each citizen who can enjoy the benefit of a public good has an incentive to try to lay the whole burden of provision on others, whenever the exclusion of nonpayers is very costly or impossible. Markets work to exhaust the gains from trade and cooperation because each individual has an interest in finding and capturing any and all such gains. Of course, when free riders can enjoy a public good without payment or trade, production and the potential gains from it may never occur. Efforts to originate government programs and to control them in the public interest are no different. The public decision-making process is a procedure for generating a public good and the persons involved in it, whether they are the voters, judges, legislators, or civil servants, all can be expected to treat it as any other public good. A public good is a very special class of goods, which cannot practically be withheld from one individual consumer without withholding them from all. In other words, a public good is ...

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