[FOUNTAIN]Demonstrators in the darkIn 1845, the French economist Frederic Bastiat wrote a parody lampooning protectionism. In his story, candlemakers submit a petition to the Chamber of Deputies of Third Republic. “We are suffering from the ruinous competition of a rival,” they say, “who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market at an incredibly low price... This rival, which is none other than the sun, is waging war on us mercilessly.” The French candlemakers demanded legislation banning not only the import of foreign candles but also natural lighting. They asked the Chamber of Deputies to prevent “artificial” competition and boost demand. However, the Chamber of Deputies turned down the petition, for it ignored the interests of consumers.
The American economist and social scientist Mancur Olson theorized in his book, “The Logic of Collective Actions,” that “only a separate and ‘selective’ incentive will stimulate a rational individual in a latent group to act in a group-oriented way.” In other words, those who participate in a group action might openly advocate public and national interests but are, in fact, strictly pursuing personal interests.
The bigger the interest, the tighter the group will stick together, and the more intense the collective action will become. The problem is that the resistance of the general public to a collective action by a certain interest group is surprisingly insignificant. Why is the public so indifferent? The benefits are concentrated on a certain group, but the social cost is widely distributed, so each individual suffers minor damage. In this case, the group benefiting will ignore the damage on the general public based on the reasoning that its members will gain maximum benefits at a minimum cost. It is referred to as “rational ignorance.” The flip side of the tendency is that even an important national interest can be ignored in order to minimize the individual damage on each interest group.
Throughout last week, large-scale demonstrations protesting a free trade agreement between Korea and the United States were staged around Seoul. The leaders of farmers’ organizations, labor unions and the film industry urged the government to immediately suspend the negotiations, claiming that a trade pact with the United States would represent a step back for labor rights, render the country dependent on imported food and kill the domestic film industry. Their arguments might sound reasonable in their own ways, but they ignore the interests of domestic consumers and economy in general.
by Kim Jong-soo
The writer is an editorial writer of the JoongAng Ilbo.