Che Guevara and the "1/n Challenge"

By Alejandro Reuss

There are enormous advantages to teamwork. People working jointly can accomplish more with the same effort than the same people could accomplish working individually. Compare, for example, the amount of water 100 people can move if organized in a fire line compared to the amount that they could move by running around with their own buckets. But any group activity also raises the problem of how to divide the benefits. One simple, and fair-sounding, solution is to give each participant an equal share.

Mainstream economists are quick to point out, however, that equal division creates a problem of incentives. Suppose that by making a little extra effort, an individual could increase the output of a group project. If the output is divided equally, the hard worker will only receive a fraction of that extra production. If there are five members of the cooperative, for example, each will get only 1/5 of the extra output. If we say there are "n" workers in the cooperative, the hard worker will only get "1/n" of the extra output. (For this reason, economists have dubbed this the "1/n problem.") Assuming each member is only interested in his or her own benefit, the economists conclude, there will be too little incentive for the individual to put forth the extra effort.

What does all this have to do with Ernesto "Che" Guevara? Quite a bit, actually. Granted, not many people think of economics when Che Guevara's name comes up. They think of a dashing adventurer, guerrilla leader, and revolutionary martyr. During his years as a leader of the Cuban revolutionary government (1958-1965), however, Che was one of the country's principal economic policymakers, serving as director of the National Bank and as Minister of Industry. He was also the principal instigator of the "great debate on political economy" - about the relative merits of material versus moral incentives to individual effort. Che was the standard-bearer for the latter.

Che was convinced that people were capable of acting out of altruism, self-sacrifice, and revolutionary dedication instead of self-interest. He had seen this repeatedly in revolutionary Cuba - from the efforts of youthful volunteers in the country's literacy campaigns, to the voluntary labor done by workers after hours, to the way people pulled together during the Bay of Pigs invasion and the Missile Crisis. Moreover, he insisted on the importance of appealing to people's altruistic, rather than self-interested, motives as a "fundamental objective" of Marxism. "Marx was preoccupied both with economic factors and with their repercussions on the spirit," he argued. "If communism isn't interested in this too, it may be a method of distributing goods, but it will never be a revolutionary way of life."

This brings us back to the "1/n problem." Equal division creates an incentive problem only if the people involved are out only for themselves. Mainstream economists make this their basic assumption about human nature. Che, in contrast, thought people could learn to be altruistic, but believed they wouldn't as long as society conditioned them to act on the basis of self-interest.

Contemporary experimental economics bears him out. Experiments have shown that people accustomed to situations where individual incentives are perfectly aligned with group interests tend to behave poorly in subsequent situations where their self-interest runs counter to those of the group. Why? Because they don't have experience in facing the moral choice between their interests and those of others. They have not learned to act altruistically.

The mainstream economists are quite right in saying that, under equal division, individual self-interest is not perfectly aligned with the interests of the group. This, however, can be seen as one of its virtues. This makes it a school for altruism, for a "revolutionary way of life." Precisely because this form of cooperation does not work well when people are only out for themselves, all have to learn to pull together. Sometimes people will rise to the occasion; other times, they won't. Call that the "1/n challenge."

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For further reading:

Numerous writings by Che Guevara, along with other interesting materials, are available at http://www.marxists.org/archive/guevara/index.htm.

For two good collections of Che Guevara's writings in English translation, see David Deutschmann, ed., Che Guevara Reader: Writings on Guerrilla Warfare, Politics and Revolution, from Ocean Press (http://www.oceanbooks.com.au/) and Che Guevara Speaks: Selected Writings and Speeches, from Pathfinder Press (http://www.pathfinderpress.com/).

For more on the "great debate," see The Great Debate on Political Economy, including contributions by Che Guevara, Ernest Mandel, and others, also from Ocean Press.

The definitive collection of Che Guevara's writings in the original Spanish is Obra Revolucionaria, Roberto Fernandez Retamar, ed. (published by Ediciones Era).

© 2003 Center for Popular Economics