Public Intellectuals slogan for a social movement, a logo for a community organization, or a policy proposal for a public problem. Hayek: Interesting. And how would that help with the collective action problem? Ostrom: Well, as you know, the collective action problem is the situation where individuals have an incentive to free-ride or defect from a cooperative arrangement that would benefit the group as a whole, such as managing a common-pool resource, providing a public good, or reducing a public bad. This problem arises because of the divergence between individual and collective ratio- nality, and the difficulty of monitoring and enforcing agreements. Hayek: Yes, I am familiar with that problem. In fact, I have argued that the best way to solve it is to rely on the spontaneous order of the market, where prices signal the scarcity and value of resources, and compe- tition incentivizes innovation and efficiency. I have also warned against the dangers of central planning and intervention, which distort the price system, suppress local knowledge, and create perverse incentives. Ostrom: I agree with you that markets are an import- ant and powerful mechanism for coordinating human action, and that central planning and intervention often fail or backfire. However, I also think that markets are not the only or always the best solution, and that there are many cases where collective action problems require other forms of governance, such as self-organization, polycentricity, and participatory democracy. Hayek: How so? Ostrom: Well, for one thing, markets are not always perfect or complete. There are many situations where markets fail or are missing, such as externalities, public goods, common-pool resources, asymmetric informa- 179