Lindblom - The Market System - Afghan Journalists' Committee

6 Market System Ascendantengaged in industry. Hypothetically, this can all be arrangedthrough central command, but in historical fact, it has beenlargely arranged by buying and selling.Three kinds of markets are the most familiar: labor markets,agricultural markets, and markets for services andgoods that industry provides to consumers. Two less obviouskinds of markets are no less necessary for a market system.One is markets for intermediate services and goodsproduced for other producers—for example, computer chipssold to enterprises that assemble computers from purchasedparts. The other is markets for capital, specificallymarkets for loans, securities, and other kinds of investments.In these two kinds of markets the major participantsare no longer ordinary people but entrepreneurs, enterprises,and financial institutions.The rise of market-system coordination of the productionof services and goods for sale outside the householdwas slow and uneven, but by about 1800, England qualifiedas a market system (some historians put it earlier), andWestern Europe and North America followed.Drawing people out of the household into a wider coordinationwas, however, an idea antedating the market system.The usual formula for doing so was central coordination.Ancient Egypt’s rulers drew labor from each householdin order to put it to work on irrigation projects, defense ofthe realm, and construction of temples and pyramids. Althoughroyal coordination of a vast labor force declined insubsequent centuries, the idea of societywide central coordinationdid not. It was still alive more than three thousandyears later, in the mid-nineteenth century, in the desire ofcommunists and some socialists to organize society by centraldirection. At their most ambitious, they envisaged doingaway with money, prices, and markets, all considered