Russell Hardin’s Collective Action (1982) is a classic of political science. In this chapter for a volume honoring him, I pursue some ways in which the American colonies and states, as well as the citizens of these polities, were subject to collective action problems, and occasionally and temporarily managed to overcome them. Although my ultimate motivation is to understand the issues that confronted the framers of 1787, the present narrative ends just before the convocation of the Federal Convention.
I shall consider the cooperative or non-cooperative behavior of colonies and states in three arenas: contributions of soldiers and money in wars against the Dutch, Indians, and the British, as well as in the suppression of domestic insurrections; participation in the non-importation, non-exportation, and non-consumption movements directed against Great Britain; and trade relations among the states after independence. I draw heavily on a remarkable early study by Arthur Schlesinger Sr. and, on the theoretical side, on recent work by Keith Dougherty.
I begin by citing some discussions by Benjamin Franklin and James Madison that demonstrate their remarkably sophisticated insights into problems of collective action. Although some earlier writers, notably Aristotle (Politics 1261 b) and Hume (1978, pp. 520–21), clearly understood the abstract logic of collective action, to my knowledge these two American writers were the first to apply it to concrete social or political situations. While I do not claim there was any direct connection between their analyses and my narrative, I believe they provide valuable pointers to the mindset of people in the colonies and, later, in the states. Madison’s brief comments on shame as a motivation for cooperation, for instance, echo the more context-specific observations by George Mason.
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Madison’s “Vices of the Political System of the United States” will serve as a good starting point. Written shortly before the Federal Convention, this document focuses on three issues: the weakness of the confederation, the lack of cooperation among the states, and the injustice of state laws. Since the weakness of the confederation was largely an effect of the lack of cooperation among the states, I shall consider only the two other issues. With regard to lack of cooperation, I shall also discuss Franklin’s “Reasons and motives for the Albany plan of union” (1754). Later, I consider the many plans for union between 1643 and 1781—some of them realized, others not—in the light of these texts.
Any confederation is vulnerable to collective action problems. In the European Union, the “race to the bottom” in corporate taxation offers an example. Such lack of cooperation among members of a union or confederation can have several sources, as Madison noted:
It is no longer doubted that a unanimous and punctual obedience of 13 independent bodies, to the acts of the federal Government, ought not be calculated on. Even during the war, when external danger supplied in some degree the defect of legal & coercive sanctions, how imperfectly did the States fulfil their obligations to the Union? In time of peace, we see already what is to be expected. How indeed could it be otherwise? In the first place, every general act of the Union must necessarily bear unequally hard on some particular member or members of it. Secondly the partiality of the members to their own interests and rights , a partiality which will be fostered by the Courtiers of popularity, will naturally exaggerate the inequality where it exists, and even suspect it where it has no existence. Thirdly a distrust of the voluntary compliance of each other may prevent the compliance of any, although it should be the latent disposition of all.
I shall discuss these three explanations in turn.
I shall generalize the first explanation slightly, as “every general act of the Union must necessarily bear unequally hard on or yield unequal benefits for some particular member or members of it”. Often, there can be several Pareto-improvements (which would benefit all), each of which benefits some agents more than others. In that case, the resentment or envy generated by the adoption of one solution rather than another could in theory be alleviated by side payments to equalize the gains. If, as Madison suggests, some agents might lose from the change, the winners could compensate the losers. (If they cannot afford to, the change is not worth making.) In practice, such schemes tend to be unworkable, because the magnitude of losses and gains will be hard to assess. They are also, for the reason Madison states in his second argument, likely to be controversial.
In the pre-history of the Federal Convention, I have only come across one attempt to create side payments, to equalize losses rather than gains. When the First Continental Congress worked out a non-exportation agreement in 1774, it granted an exception to the rice growers in South Carolina, on the grounds that the non-exportation of rice, unlike that of indigo, would do little harm to the British. “Low-country indigo growers and up-country provision exporters felt slighted and the whole province was bitterly divided along both sectional and interest lines over the partiality shown to the rice planters. In response to the crisis, South Carolina’s proponent of the [Continental] association devised an elaborate scheme whereby these smaller producers could swap a portion of their crop for rice at a fixed ratio of value. In this way the burden of non-exportation would be shared by all, at the same time preventing the general economic collapse that would have followed a complete embargo on rice, the colony’s premier cash crop”.1 The plan was never implemented, perhaps because of complaints on behalf of “the Hemp Grower, the Lumber Cutter, the Corn Planter, the Makers of Pork and Butter etc.”, who might also deserve to be compensated.2
Madison’s second explanation for lack of cooperation cites the tendency of the states to exaggerate or even invent such resentment-generating inequalities. Although he does not say why they would do so, one motive could be to justify non-cooperative behavior. A state’s refusal to cooperate in a situation of perfect symmetry—in which all states had equal costs and benefits from cooperation—would burden it with an opprobrium that could be harmful. Although naked interest may be an acceptable motive in the relations among independent states, it is more difficult to defend in a union of states.
Among his explanations of non-cooperation, Madison does not include the standard Prisoner’s Dilemma.3 In that model, one assumes that non-cooperation is a dominant strategy for all agents, who are assumed to be moved only by their self-interest . To achieve cooperation, one must rely on negative or positive incentives, imposed by an external authority.4 In his third explanation, he suggests that the situation can be an Assurance Game5 rather than a Prisoner’s Dilemma. In the Assurance Game, the obstacle to cooperation is not self-interest , as it is in the Prisoner’s Dilemma, but rather lack of information, or, as Madison says, distrust. If each state were confident that the others would comply, it would do so too. Madison’s second explanation tends, however, to undercut the third one.
Madison’s diagnosis can be usefully supplemented by Franklin’s eloquent analysis of the need for union, of the obstacles to union, and of the best way of overcoming the obstacles.
Concerning the need for union, Franklin refers to events during King George’s War (1744–48), citing the facts that “the assemblies of six (out of seven) colonies applied to, had granted no assistance to Virginia, when lately invaded by the French, though purposely convened, and the importance of the occasion earnestly urged upon them; that one principal encouragement to the French, in invading and insulting the British American dominions, was their knowledge of our disunited state, and of our weakness arising from such want of union; and that from hence different colonies were, at different times, extremely harassed, and put to great expense both of blood and treasure, who would have remained in peace, if the enemy had had cause to fear the drawing on themselves the resentment and power of the whole”.
Concerning the obstacles to union, Franklin refers to the experience of
one assembly waiting to see what another will do, being afraid of doing more than its share, or desirous of doing less; o...