Mancur Olson's great theory is self-sabotaging

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Mancur Olson, the Economist No One Teaches

There’s a curious amnesia that afflicts economics departments and political salons alike. Certain thinkers, despite being manifestly correct, vanish from the syllabus, their insights quietly shelved. Not because they were wrong, but because they were right about the wrong people.

Enter Mancur Olson.

Olson, in his bleak and brilliant The Rise and Decline of Nations, offered a theory so lucid it ought to be inscribed on the walls of the Treasury. Societies that enjoy long periods of peace and stability accumulate what he called “distributional coalitions”—interest groups, cartels, professional associations, trade bodies, all dedicated to the slow, relentless extraction of rents.

Not bandits, but guilds. Not revolutionaries, but consultants. Not robber barons, but regulators.

As these groups multiply, they jam the gears of the economy: lobbying for protections, closing ranks against innovation, turning policy into a maze of self-serving exceptions. Monopolistic underproduction stifles growth. Lethargic, self-protecting decision-making kills dynamism. The economy sprawls: fat, stupid, and self-congratulatory—until liberated by the destructive crash, the crushing military defeat, or the elite-vanquishing coup.

It’s Schumpeter without the pulse-raising romance, Marx without the bloody revolution. Olson doesn’t see class viciously suppressing class. He just needs a long timeline and a civil service pension scheme.

So why is Olson rarely mentioned?

Because Olson was not, like so many economists, engaged in comforting abstraction. He named names—implicitly, yes, but unmistakably. He made it clear that the main obstacles to development, reform, and renewal are not the unwashed masses or rogue venture capitalists but the respectable, the credentialed, the professionalised—the very people who decide what ideas are “serious”.

Olson’s real target is:

• Your local NHS consultant who lobbies against foreign-trained doctors
• The university HR committee that mandates DEI statements while stifling heterodox ideas
• The corporate lobbyist who co-writes the regulations their firm already complies with.

In fact, the entire structure of elite consensus that speaks in the passive voice and never declares an interest.

This, of course, cannot be admitted.

So Olson is placed in the academic attic: acknowledged, perhaps, in a footnote, but never allowed to shape the conversation. His books are not denounced; they are simply not assigned.

Reading The Rise and Decline of Nations in Olson's trademark calm, detached, erudite style—watching his ideas about special interest groups lock macroeconomics into real history and real human behaviour—one begins to wonder why he never turned the spotlight on academic economics itself. 

Did the Emperor thank the tailor who revealed his nakedness?

No Marxist, Olson’s crime was subtler: to be right without theatrics. He posed no threat to capitalism—only to those profiting from its decay. That made him too dangerous to associate with. His toolkit was too accurate, too generalisable, too unsettling.

It’s also what makes him essential.

If you want to understand why the UK can’t build a railway, why housing is unaffordable, why the civil service is paralysed, why productivity flatlines while LinkedIn thrives—read Olson.

Then ask yourself why almost no one in public life ever quotes him.

They don’t forget.
They remember perfectly well.
That’s why they look away.