The “Free Rider Problem”

by | Aug 29, 2012

Advocates of a number of government interventions often argue that such measures are required to deal with the “free rider problem.” Indeed, Mitt Romney has called his insurance mandate in Massachusetts a “free rider surcharge.” Wikipedia describes the “free rider problem” as: In economics, collective bargaining, psychology, and political science, a free rider (or freeloader) […]

Advocates of a number of government interventions often argue that such measures are required to deal with the “free rider problem.” Indeed, Mitt Romney has called his insurance mandate in Massachusetts a “free rider surcharge.”

Wikipedia describes the “free rider problem” as:

In economics, collective bargaining, psychology, and political science, a free rider (or freeloader) is someone who enjoys the benefits of an activity without paying for it. The free rider may withhold effort or resources, or may impose the costs of his or her activities on others. The free rider problem is the question of how to limit free riding (or its negative effects).

Interestingly, the “free rider problem” does not arise with private businesses. For example, while it is argued that public parks are necessary because of free riders, Disney World has no problem excluding those who will not pay. The “free rider problem” only arises when government is involved.

For example, it is argued that those who do not have health insurance are a burden to tax payers. While this is true, it begs the question: should taxpayers be forced to pay for the health care of those who cannot afford to pay themselves? The answer is; NO. Nobody should be forced to pay for anything against his own judgment. If government quit forcing taxpayers to pay for the health care of the needy, the “free rider problem” in health care goes away. In truth, there is no “free rider problem” in regard to any product or service.

Consider taxation, which should be abolished. Without the use of coercion, government funding would have to be obtained through voluntary means. Often, when someone hears this claim, they respond, “If supporting government is voluntary, nobody would volunteer.” Such a statement is wrong, both factually and philosophically.

Factually, even with today’s oppressive taxation, millions of individuals provide voluntary support for the legitimate and proper functions of government—the police, the courts, and the military. Millions of Americans support police departments through the 100 Club, police foundations, and other fund raising activities. They support the military through the USO and hundreds of other organizations. Rational individuals recognize the value provided by government, and they willingly and voluntarily provide financial support.

But what of those who do not provide support for government? Aren’t they “free riders”? Aren’t they getting the benefits of government without paying for it? The answer is: yes they are. But why is this a problem?

If someone robs my neighbor, it is in my self-interest that the criminal be caught and punished, whether my neighbor has donated to the police department or not. My neighbor may be the victim today, but if the thief remains free, I could be the victim tomorrow. In other words, the violation of my neighbor’s rights is a threat to mine, and I definitely have an interest in removing such threats.

The philosophical root of the alleged “free rider problem” is altruism. According to altruism, we have a moral duty to self-sacrificially serve others. Thus, taxpayers should be forced to pay for the health care of the poor and needy. The poor and needy thereby become “free riders.”

Further, according to altruism, selfishness means sacrificing others to oneself. According to altruism, life requires sacrifice, and the only issue is who will be the victim. Consequently, altruists believe that selfish individuals will not voluntarily contribute to government, and therefore, they must be forced to do so. As I briefly noted above—and address in greater detail in my book—this claim is patently false. Selfish individual value a government that protects their rights, and they will (and do) voluntarily pay for the protection of those rights.

As with virtually every perceived political problem, the real issue lies in morality. We can solve the “free rider problem,” not with government force, but by rejecting the morality upon which it stands.

Brian Phillips is the founder of the Texas Institute for Property Rights. Brian has been defending property rights for nearly thirty years. He played a key role in defeating zoning in Houston, Texas, and in Hobbs, New Mexico. He is the author of three books: Individual Rights and Government Wrongs, The Innovator Versus the Collective, and Principles and Property Rights. Visit his website at texasipr.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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