The Free Rider Fallacy
Why Coordination Problems Don’t Prove Objective Value
The free rider problem is often cited as proof that certain goods possess objective value. Roads, national defense, clean air—these are called "public goods" because they’re said to benefit everyone, even those who don’t pay. And because some people can enjoy them without contributing, it’s argued that coercive taxation is justified to solve the problem. But this logic rests on a fallacy: confusing coordination failures with value itself.
The essence of the free rider problem is a misalignment of incentives. When a good is non-excludable—meaning you can’t stop people from using it—individuals have less reason to pay voluntarily. This is real. But it does not follow that the good has value in some objective sense, independent of individual preferences. That leap is the fallacy.
To be clear: just because someone benefits from something doesn’t mean they value it in the economic sense. Value is revealed through sacrifice—what one is willing to give up to gain or preserve something. If people are unwilling to pay for a road, even if they use it, that tells us something crucial: they don’t value it enough to fund it voluntarily. The road’s “value” in this case is parasitic on coercion.
The rhetoric of the free rider problem is deployed to justify forcing people to pay for things they may not want, and calling this “fair.” But fairness here is circular: it assumes the good has value for everyone, then punishes those who don’t act accordingly. This is political mythology, not economics.
Valuation is inherently subjective. A road in the desert may be a lifeline to one person and irrelevant to another. Aggregating preferences through voting or taxation doesn’t erase this fact—it obscures it. Treating collective benefit as evidence of objective value is simply wrong. Benefit is not sacrifice. Usage is not willingness to pay.
Real coordination problems do exist. But solving them doesn't require abandoning subjectivity. Mechanisms like assurance contracts, crowdfunded incentives, or decentralized autonomous organizations (DAOs) can facilitate voluntary contributions. Open source software is a public good, yet much of it is created and maintained without coercion. This proves the point: coordination is hard, but that’s not the same as value being objective.
The free rider fallacy smuggles coercion in through the back door, pretending it's just a technical fix. But when you admit that value is subjective, the real question becomes: who cares enough to act? And how do we align incentives to make that action possible—without pretending that everyone values the same things?
We must stop mistaking collective convenience for moral necessity. Coordination does not require coercion. And value never exists apart from the agent who values.