Lindblom - The Market System - Afghan Journalists' Committee

What Efficiency Requires 129The burden or cost of pots and pans consists of the othervalued outputs forgone—outputs that could have been enjoyedif resources were not used to make pots and pans.Cost is not simply a technical concept of secondaryrather than fundamental significance. Nor does the word alwaysrefer to money. Some burdens—costs—are expressedin money; but the examples just given show that many arenot. Even more important, money costs have no significanceexcept as they represent performances and objectsforgone. If you read that in Denmark it costs 200,000 kronerto send a person to college for a year, the significance of thestatement is that some persons must carry the burden ofgiving up the benefits that the 200,000 kroner so spentmight have otherwise bought for them.The key requirement for allocative efficiency is somemethod of weighing the value of what is to be taken or receivedagainst cost, which is the value of what is to be forgone.Obviously a choice is efficient if the value received isworth the value forgone. If that proposition is a commonplace,it is also one of the most useful of all those key anduniversal propositions through which we cope with thedays of our lives. Efficiency requires either the maximum invalue to be received from a given cost or the least cost for agiven value received—in short, efficiency means least-costdecisions.If allocations are to be efficient for the whole society,everyone’s benefits and burdens have to be weighed. Whenbenefits for some people throw costs not on them but onothers, the comparison of benefit with cost is enormouslydifficult. For example, widespread benefits of automobileshave to be compared with the value of lives lost in accidents.Opinions differ both widely and contentiously onwhose benefits warrant whose losses. Still, the requirement