I was just thinking about free-rider problem. Have you ever heard someone say “… but they will free-ride on this or that …” when talking about the state created things or sometimes even private endeavors. Well, if you haven’t, I sure have. So I was thinking if the problem is actually real, and what to do about it. Just for the argument’s sake, I didn’t go into the state directed monopolies, but stayed in the private arena. And I don’t think that the free-rider problem is as relevant.
I don’t think it’s that relevant, because in some respect it exists between job takers and job makers. There’s always people who create first and those who prefer to let the first do their job and then employ them. The job takers are in effect free-riding on job-maker’s accomplishments and the status that this person has gained, as well as respect. It totally depends, in free market, on how they will be able to communicate… and therefore I would think, that for let’s say, per one hour of work, 30% premium is deducted from the job taker’s maximum possible salary, as a means to pay off the job maker (or creator) as to avoid the free-riders. If one wants full salary, they will just have to go do it on the “free market” as that job maker did before. Thus free-riding is of no concern because it’s not free anymore.
Some might suggest, that free-riding on patents is problematic, because someone already put some of his time and intelligence to think things through, and using the idea or the patent for their own use or for profit would be free-riding on the idea. Again, I don’t see a problem. For one, the person who came up with the idea first already has the natural monopoly on the idea for some time, except of course if they choose to patent it through the State (undesirable coercive force, which in patent law demands the patent to be fully written and described as to enforce protection thereof). If the State Patents are removed, and if we return to the free market of ideas and so called “intellectual property” it is on the side of the creator to either protect the idea with secrecy (as magicians have done for as long as they exist) and only tell the secret to the select trusting few. Thus they can create scarcity and increase price for at least as long as someone else figures it out. If someone tells the secret, that someone is shunned and pushed out, as magicians have demonstrated well in the past. Therefore it is in some cases desirable to have secrecy. If for example you go the other route, and put the patent or idea out for the world (open-source it) to grab, there’s an added advantage of dropping the prices of production due to competition which is good for the customer, as well as access to advancements that are somewhat free to the original creator as well. Free-riding ought not to be a concern too much, because one first needs tools and material to build that something, and then advance it. In a long run it only ever makes sense to deliver quality and often even products that were built with older technologies but are of higher quality than the cheaper advanced products, sell well (although not as much as in the start). So let’s say one wants to create good shoes. He can either get into the field as an apprentice, thereby making the free-rider problem null, because he has to learn. He can also do research and take longer than apprentices because he has to do it all alone. He can also buy a company which has already done it (even if in past – and perhaps resurrect it with higher quality products, perhaps employing the same people who used to work there). If the knowledge was secret, none of that would be possible and again the free-riding argument would be inapplicable.
I guess, there could be some argument on the emotional side, akin to “I don’t like the fact that I did so much work and now the other guy took my idea and ran with it… I hate this guy.” I would suggest, that this is largely an emotional response and the State shouldn’t have to deal with emotionally unstable people.
Anyhow, it seems to me that the two examples I made show well enough, that free-riding is of little legitimate concern in respect to private property owners. I would suspect, that similar logic could be applied to the free-rider problem on the so called “commons” such as roads and other State-run enterprises. If someone wants to think it through, please do so and comment on it. But perhaps, if nothing else, I might leave the roads and the free-rider problem for some other time. Until then, I think I will stick to the proposition, that the free-rider problem is not that problematic.