Lindblom - The Market System - Afghan Journalists' Committee

9What Efficiency RequiresDespite what we have said about the rule of quid pro quo,all over the world a pattern of market-system success seemsclear. Although some market societies—Paraguay, for example—leavemost people in poverty, the highest standardsof living for masses of people are found only in the marketsocieties. To Adam Smith the market system accounted forthe “wealth of nations.” His explanation, once derided insome circles, seems confirmed by the collapse of communistsystems, whose central direction of economic life increasinglylagged behind the market systems in output andstandard of living. In the third world too, nations on themarket path grow faster than those not. China’s moves towardthe market system appear to have set a world recordfor speed of growth. If either per capita output—often measuredas per capita gross domestic product—or some othermeasure of standard of living is taken as an indicator, themarket system is impressive. That is not surprising, consideringthat it is, as we have seen, the most embracing andprecise system of enormously large-scale cooperation thathumankind has ever invented or stumbled into.Is that all that needs to be said about efficiency? No, formany questions remain. Does the market system simplypile up output, or does it make efficient choices among possibleoutputs? Beyond manageable questions like that lieharder ones, such as: Can production be called efficient ifit is achieved, as some people believe, by exhausting theearth’s resources or by environmental degradation? And still