The basic argument is set forth on page 2 (emphasis in orginal):
Unless the number of individuals in a group is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational self-interested individuals will not act to achieve their common or group interests.
Olson writes on page 64 that self interest is not a requirement for this outcome. Even rational altruistic individuals will not act to further group interests if they realize that their efforts, as one of many, will have no perceptible effect on the outcome.
Olson says several times that groups by definition act in the interests of members, though he admits to potential in-fighting and capture by leaders in footnotes. However, if coercion must be involved (the success of other special devices such as exclusive contributor services is downplayed), what is to prevent a rather permanent state of affairs in which members are forced to act against their own interests? I use the word state in the preceding sentence advisedly.
A very long and curious note on page 48 (note 68 of chapter I “A Theory of Groups and Organizations”) begins and ends with (middle elided):
There is one logically conceivable, but surely empirically trivial, case in which a large group could be provided with a very small amount of a collective good without coercion or outside incentives.
total costs of the collective good wanted by large groups are large enough to exceed the value of the small fraction of tht total benefit that an individual in a large group would get, so that he will not provide the good. There may be exceptions to this, as to any other empirical statement, and thus there may be instances in which large groups could provide themselves with (at most minute amounts of) collective goods through the voluntary and rational action of one of their members.
This quote is typical of Olson’s insistence that public goods just don’t get produced without coercion or individually excludable inducements, which he notes shift the individual’s indifference curve to the left or right respectively.
In 2004 the above quote cries out for a response of “professor, what about open source?” However, I suspect that Olson thoroughly underestimates in general the extent to which private efforts motivated by private returns produce positive externalities, thus reducing the need for coercion. As I previously mentioned in an aside, the extent of private and public good co-production(?) is a crucial if unstated aspect of nearly any policy debate.
When applied more narrowly to private associations Olson’s argument is fairly compelling, though not novel, as perhaps it seemed in 1965.
Olson seems somewhat congruent with public choice economics. While I like to summarize a key insight of the latter as “concentrated interests trump diffuse interests”, Olson emphasizes the great difficulties groups face when pursuing a common goal, e.g., attempting to trump diffuse interests via “special interest” lobbying. Perhaps it isn’t such a bad thing that groups have a difficult time acting to achieve group interests, that is when group interests may be furthered by stealing rather than production.