Lindblom - The Market System - Afghan Journalists' Committee

100 How It Worksposes for which societies establish a judiciary—dispassionateadjudication—is undercut.Societies sometimes reduce the domain of the marketsystem not because compulsion is necessary but because itis cheaper. Although we can imagine each of millions ofhouseholders paying neighbors to remove their unsightlyand unsanitary trash, it would be cheaper simply to usemunicipal ordinances to compel their removal. Similarly,wealthy people can buy a good deal of privacy—building secureliving quarters and fences, hiring their own guards—but they will often find it cheaper simply to use the law tolay down and enforce rights to privacy. For all its rhetoricalcelebration of liberty, a society may draft rather than hireits army simply because it is cheaper to do so.A large category of circumstances in which societieswant to prohibit or constrain market coordination—onethat includes some of the reasons already listed—consistsof transactions that produce significant spillover effects,that is, consequences for persons not party to the transaction(see Chapter 11). If, for example, the market transactionsof business enterprises pollute air or water—or if I createnuisances for my neighbors—the state will often step into overrule or modify market coordination.A strikingly different objection to the market system isharbored by political elites in authoritarian systems. Theyfear a connection between the market system and the politicalpower of citizens, for they see that market systems dispersepower or control over the society. They would ratherexercise the controls themselves, as indicated in persistentSoviet party and governmental refusals to disperse controlthrough markets following announced intentions to do so.In democracies, rulers sometimes, for reasons that may includetheir own enrichment, prefer to maintain some con-